Thongs and crowd-surfing: Why live music events can’t afford insurance

The insurance industry has told a parliamentary inquiry into the state of live music that climate change and unpredictable behaviour at gigs are to blame for rising premiums, in the face of venue closures and festival cancellations.

Alexandra Hordern, from industry body the Insurance Council of Australia, acknowledged on Friday that escalating costs had played a “significant role” in the shrinking viability of smaller and medium-sized venues.

Crowd-surfing is among the reasons insurance has risen for live music. Credit: Sebastian Costanzo

But she told the House of Representatives committee the growing impact of natural disasters, higher and more frequent injury payouts and the difficulty of managing live environments where alcohol was served had led to “decreased risk appetite” for underwriters.

The inquiry was announced in May to examine the challenges facing the industry, following the shock cancellation of one of Australia’s longest-running festivals, NSW’s Splendour in the Grass, amid poor ticket sales.

It came after the cancellations of a series of festivals including Groovin the Moo, and closures of much-loved live music venues. A report by the Australasian Performing Right Association and Australasian Mechanical Copyright Owners Association last year found that more than 1300 Australian venues had permanently closed since the start of COVID-19.

Artists and struggling venues have decried skyrocketing public liability insurance, sometimes up to 10 times higher, to cover injury or damage, with some calling for offsets for payroll and land tax. Earlier this year, Fitzroy’s Old Bar made a decision to ban punters from dancing while drinking, to secure insurance.

Liam Matthews, the owner of Old Bar in Fitzroy, has called for government help for soaring public liability costs, and consideration of offsets for smaller live music venues for payroll tax or land tax requirements.Credit: Penny Stephens

Jason Holmes, director of H2 Insurance, which specialises in the entertainment industry, told the committee led by Labor MP Brian Mitchell that claims risked outweighing the value of premiums. He said inappropriate footwear was a frequent issue, with settlements for broken ankles jumping from $10,000 to $100,000 over a decade.

“You can even say, in terms and conditions, wear appropriate footwear, and people still turn up in thongs. Can you deny someone entry for wearing thongs or not? Maybe you can, but then someone slips over,” he said.

Holmes, a former musician, said he continued to be shocked by dangerous artist interactions, including crowd-surfing, adding that gigs’ unpredictability were leading to incidents outside of venues’ control.

“We had an incident back at a venue ... where someone was crowd-surfing and had kicked someone in the head,” he said. “[They] had to get attended to via ambulance at the event, and they ended up suing,” he said. He added the decision of concertgoers to drink at home beforehand, amid cost of living pressures, was also hurting venues’ bottom lines.

Hordern said the domestic insurance market for live music was small, and many venues and festivals had to seek insurance internationally, often through UK market Lloyd’s of London. She said the increasing frequency of natural disasters had seen insurance premiums rise worldwide.

Australian festivals are no stranger to more direct impacts from weather events. Victoria’s Pitch festival was called off in March following extreme heat and fire warnings, leaving attendees already at the site to scramble to leave the bush.

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