Sydney’s night-life struggles to the rising inflated insurance bill

Sydney’s night-life has faced a series of blows from lockout laws, Covid and the cost of living crisis. The rising price of insurance threatens to be the next hurdle.

As Sydney officials work to shrug off the image of a city at war with its own night-life, insurers have been accused of making the situation worse by pushing insurance premiums that have left the future of the city’s live music in question.

Public liability insurance underwrites any unexpected injuries or property damage a business may endure. But with a decline in the number of insurers offering it, fewer of those left are willing to cover the anecdotally risky “amusement industry”.

With venues facing a wave of paranoia-prone insurers, each business is made to fear a wet floor or haphazard dance floor spin.

Caroline Buckingham is the owner of the Dulwich Hill jazz bar Butchers Brew in Sydney’s inner west, and she has found herself struggling under a one-size-fits-all outlook on music venues from her insurers.

“Our PLI went up by 50 per cent, it was ridiculous,” she said.

“I think there’s an assumption that live music is a bit risky – like it’s all black T-shirts and mosh pits – but we’re mostly a jazz venue.”

Butchers Brew has never had a major incident prompting a PLI payout, and Ms Buckingham has always wanted to run a venue that support local businesses around it, going as far as to institute a BYO food policy that actively encouraged patrons to bring in takeaway from the surrounding restaurants and food vendors.

Jazz musicians Tim Gelden (left) and Neil Caine (right) perform at Butchers Brew in Dulwich Hill. The Inner West jazz bar has struggled to meet rising premiums for public liability insurance. Picture: Sonic Sydney

But with a drop in discretionary spending amid the cost-of-living crisis, Butchers Brew has seen fewer guests willing to shell out the door fee.

It’s a problem that has only grown worse as Australians look to get back on top of the reckless spending of Christmas and the end of the summer.

“I feel that we’ve been quite well supported by our local inner west, and the various state and federal bodies have also been very helpful to us,” she said.

“I think now the bigger issue that we’re dealing with is financial constraints that people have. They don’t have as much disposable income to spend on live music.”

Rising insurance premiums have kneecapped live music businesses up and down the event space, with many major music ­festivals citing it as a burden on ­already steep upfront costs.

Jazz musician Dion Tucker performs at Butchers Brew in Dulwich Hill. Rising insurance premiums have hit small businesses and major festivals equally hard. Picture: Sonic Sydney

This year already, regional festival Groovin The Moo has been cancelled and Tasmania’s Dark Mofo has been postponed.

“Emerging from the pandemic straight into an operating cost crisis with punitively high public liability insurance premiums is very disappointing,” Business Sydney executive director Paul Nicolaou said.

“Insurance companies need to be mindful of the position of live entertainment venues and should do everything they can to keep premium rises to a minimum.

“The assessment of risks that might have an impact on premiums needs to be realistic so venues aren’t priced out of business. Their success is vital to the recovery and growth of the night economy.”

The Insurance Council of Australia estimated the cost of ­insurance policies for public liability surged by 20 to 30 per cent ­nationally in 2022.

NSW Small Business Commissioner Chris Lamont has seen first-hand the need for a reprieve in insurance premium rate rises.

“Businesses have reported challenges relating to public liability insurance. Common issues raised include affordability challenges increasing the risk of underinsurance, and a lack of available public liability products due to the limited number of underwriters operating nationally in certain sectors,” Mr Lamont said.

Sydney has rolled out increasingly concerted support efforts for its night-life since the Minns government appointed the state’s first music and night-time economy minister in John Graham, armed with a $103m funding push.

Sam Nardo is chief operating officer of Sydney’s Enmore Theatre. While his business has also been hit by the tighter policy of insurers, he remains optimistic for the city’s live music industry.

“It’s no secret that Melbourne has been thought of as the capital for live events over Sydney,” he said. “Sydney should be and is now getting to become what it has always had the potential to be – which is the major destination city for major events.”