By Melissa Cunningham
Melbourne’s live music venues are being hit with soaring insurance cost hikes, pushing some to the brink of closure and forcing others to bring in strict new rules like banning punters from dancing while drinking.
Industry insiders warn that venue owners are at risk of leaving in droves or failing to insure their businesses as they grapple with cost increases – some up to 10 times higher – to cover legal liability for injury or damage.
Liam Matthews was slugged $60,000 a year for liability, a sixfold increase on the $10,000 he paid just two years ago.Credit: Penny Stephens
Inside The Old Bar in Fitzroy, new signs have been stuck up all over the walls that read: “No dancing whilst drinking.” Owner Liam Matthews is the first to admit that this is off-putting for punters, but he said the venue was left with little choice.
Initially, Matthews’ new insurance policy stipulated a total ban on drinking in the band room – a move he feared would have seen his business go under soon after the pandemic battered the once-thriving live music scene.
“Imagine not being able to have a beer watching a gig?” Matthews said. “I kicked up a massive stink about it.”
Golding’s view.Credit: Illustration: Matt Golding
The reason given for the drinking ban was the risk of injury posed by a glass breaking or a punter slipping, but Matthews said the rule was “ridiculous” given his venue is carpeted.
“It’s like Footloose,” he said, referring to the ’80s film about a small town where dancing is banned.
“It’s insane. Even if there is a spill, it makes the carpet sticky, rather than slippery.”
After Matthews pushed back, his insurer outlined it would only allow him to stay open if he banned dancing while drinking in the band room.
“So now people can stand there and watch the band, while drinking, but they are not allowed to move at all,” said Matthews, who has run bars for 20 years without making a public liability insurance claim.
The Old Bar in Fitzroy, where patrons must keep on their Sunday shoes.Credit: Liam Matthews
“I’ve had to put signs up all over the venue. But how can we police that? I’ve got 200 people in the venue and two security guards at the front door. I can’t afford to hire any more staff.”
The next blow came when Matthews was stung $60,000 a year for liability, a sixfold increase on the $10,000 he paid just two years ago. Invoices seen by The Age confirm this jump. Matthews and his two business partners have taken pay cuts to foot the bill.
Old Bar is far from alone. Sasha Janssen, owner of East Brunswick live music venue Whole Lotta Love, said her liability insurance had increased from just under $3000 a year to almost $30,000.
Janssen said no clear reason was given for the rapidly increasing insurance costs.
“It’s just ridiculous and unsubstantiated,” she said.
“I don’t know a single music venue who has made a claim in the last few years. We’ve crawled out of the tail end of the pandemic and suddenly we are uninsurable.”
Venue owners are calling for government intervention and legislative reform. They argue that live music venues need their own policies as the industry is unfairly categorised with nightclubs and riskier entertainment precincts.
Janssen fought to stay afloat amid rising costs at her bar, working 80-hour weeks, but the “final nail in the coffin” was a dispute over the venue’s rent. She made the difficult decision to close in March.
“It’s completely heartbreaking,” said Janssen, who has run the live music venue for eight years. “I put everything into this place. The whole industry is really suffering.”
Melbourne live music venues Cherry Bar and Yah Yah’s have also lamented their uncertain futures due to insurance premiums, which have soared by 500 per cent.
Music Victoria is a non-profit and the peak state body for contemporary music. Its general manager, Dale Packard, said the number one grievance from live music venues, ahead of show fee increases and staffing shortages, was rising insurance premiums.
Packard cited one Footscray venue that was recently slugged with a soaring insurance bill that the owners felt did not reflect the risk posed by the venue.
Operators of live music venues say their industry is unfairly categorised with more high-risk forms of entertainment.Credit: Paul Rovere
“The definition of a music venue that they happened to fall into suggested there was no difference between a punk thrash band playing to drunk people in their early 20s and a string quartet,” he said.
Australian Live Music Business Council board member Melissa Tonkin said the insurance increases were being felt nationally.
“Some venues are paying six to 10 times what they had the previous year,” said Tonkin, whose family has owned live music venue The Gov in Adelaide for generations .
“It has caused a lot of devastation and is cause for great concern.”
She said there remained a misconception among insurance companies that live music venues were high-risk businesses.
“The truth is the vast majority in this country are so safe and professionally run.”
Insurance expert Andrew Bassingthwaighte, who also sits on a music council board and has been helping Australian venues negotiate lower insurance premiums, said there were several factors at play.
He said part of it was that insurance policies for liability were previously undervalued, and so insurers were attempting to rectify this by increasing rates and looking harder at potential risks.
This has seen some Australian venues go from paying $10,000 for their premiums to more than $120,000. There was a risk that venues would forgo insurance altogether because they couldn’t afford it, said Bassingthwaighte.
“Unfortunately, there’s no Australian banks or underwriters that will actually cover a live music venue,” he said. “So all these policies are being handled by international syndicates ... and the price has just escalated dramatically.”
Matthews said if his liability insurance increased further next year, he would have to assess whether he could keep The Old Bar open.
The Old Bar in Fitzroy hosts live music every night. Credit: Penny Stephens
“This is killing us. We’ve done the maths and to keep the bar profitable and a healthy business we would need to start charging $10 a pot, which seems crazy, but it’s true,” he said. “Our customers are not ready for that.”
The live music sector is not the only industry being hit by exorbitant public liability costs, which are escalating worldwide due to increasing climate disasters such as floods and fires, COVID, financial market conditions, scarce capital and risk-averse insurance providers.
The owners of a trampoline business on the Lorne foreshore recently said they can’t reopen this summer after quotes from insurers were close to $500,000 a year. Holiday parks across Australia have removed their jumping pillows due to rising insurance premiums.
The Insurance Council of Australia said risks for live music venues were under pressure due to factors overseas and the fact liability insurance was generally provided by international underwriters.
“Globally there has been a tightening of this market, which means insurers’ risk appetites are lower, there are fewer insurers offering the product, and the cost has increased,” the council said in a statement, adding it was working with the live music council to improve affordability.
“Unfortunately, there is no silver bullet to fix these issues, and where solutions do exist they require a collective effort by insurers, the live music sector and government.”
A spokeswoman for the federal Department of Infrastructure, Transport, Regional Development, Communications and the Arts said it was “actively monitoring” the accessibility and affordability of public liability insurance for live music venues.
She said the government was working to promote connections between industry associations, insurers and businesses and was also supporting the live music scene through the Live Music Australia program, aimed at increasing opportunities for artists.
While the Victorian government does not have the power to set or cap insurance premiums, the state’s acting minister for creative industries, Natalie Hutchins, said the government had allocated $34 million to support 10,000 gigs at local music venues across metro and regional Victoria in the last budget.
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