Ombudsman’s report finds a ‘clear and present danger’ to show ride operators amid insurance struggles

The future of hundreds of show ride businesses is under threat – and jumping castles or laser skirmish could be next. Here’s why.

“A clear and present danger” faces the amusement and recreation sector, the country’s small business ombudsman says, with insurance woes threatening the future of hundreds of businesses.

Among those hardest hit are show ride operators, who have for months struggled to secure insurance.

But other businesses such as jumping castles, 10-pin bowling, camel ride and laser skirmish businesses are also affected as insurance companies worldwide drastically increase fees and limit which operators they will cover.

Australian Small Business and Family Enterprise Ombudsman Bruce Billson has released an interim report into the insurance crisis.

Mr Billson said the lack of coverage could lead to businesses closing, significant job losses – particularly in the regions – and reduced economic activity generated by shows and amusement parks.

Harley Smans with ride the Extreme Thriller. Picture: Patrick Woods / Gympie Times

He said a “Discretionary Mutual Fund” could be a solution, but governments and councils may need to change legislation and by-laws for it to be recognised.

It follows the Australian Amusement, Leisure and Recreation Association’s push to set up a fund, which involves claims being paid from pooled member contributions.

Fifth-generation show ride operator Harley Smans, based in Adelaide, said the uncertainty around the industry’s future was “very stressful”.

“We’ve tried to negotiate sales of some of our rides but no-one will buy them,” he said.

Mr Smans is among operators who have signed up for insurance through Coversure, which provides public liability for up to $10m.

SA’s country shows have been accepting that amount this year – rather than the $20m expected by other many events and organisations including the Royal Adelaide Show. But it is unclear whether $10m in coverage will be accepted in 2022.

The Titanic slide was a new feature of the Royal Adelaide Show in 2019. Picture: Supplied, Royal Adelaide Show

Mr Smans also estimated less than 40 per cent of landowners and event organisers were accepting the $10m liability.

SA Country Shows president Rosie Schultz said the insurance hurdle was a “huge issue” – particularly for the operators of larger rides.

“They’ve got insurance until the end of the year and it’s for 2022 that it’s going to be a big issue for them,” she said. “It will put a lot of them out of business if they can’t get insurance.”

Mrs Schultz said rides were a major component of agricultural shows and without them, fewer people would attend, with less money injected into regional economies.

Michelle Hocking is the general manager for the Royal Show. Picture: Tricia Watkinson

Royal Adelaide Show general manager Michelle Hocking said organisers were “closely watching” the issue, but was hopeful it would be resolved before next year’s event.

“I’d like to think that we have the ability to offer a variety of rides from more passive to more thrillseeking level,” she said.

Showmen’s Guild of SA secretary Phillip Hamilton said most operators’ insurance premiums had gone up “300 per cent if they can get it”.

But he is hopeful the plans for a discretionary mutual fund will put the industry back on track.

Mr Billson’s office is seeking feedback on questions raised in his interim report by November 3, before making recommendations to the federal government about what assistance it could give the industry.

His report said the lack of available or affordable insurance reflected a hardening of the broader insurance market, both in Australia and internationally.

“A hard insurance market is considered one phase of the general insurance market’s cycle and is characterised by prices rising, increasing excesses and/or expanded exclusions or high prices relative to recent periods,” it said.

That could be caused by a reaction to major claims or insurers making losses in some instances.

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