‘It could be dangerous’: Music venues teetering on a knife’s edge as insurance premiums rise

As Bigsound kicks off in Brisbane today, music venues still reeling from pandemic closures are hoping to celebrate a successful comeback but rising insurance costs have created a new challenge for the industry.

The number of venues for the games has increased dramatically this year and some are being denied altogether.

The owners of Brisbane hot spot The Zoo said their wages had jumped significantly after being tested in March.

Located among the nightclubs of Brisbane’s Fortitude Valley nightlife precinct, the 30-year-old venue has hosted Australian rock outfits, from Powderfinger and Regurgitator to Nick Cave.

The zoo canceled all performances on its 440-person dancefloor in 2020.

Owner Luke ‘Boo’ Johnston has been looking for ways to keep afloat, including opening a speakeasy next door to make up for lost gigs, but any unexpected money threatens to send the Zoo under.

“For a place like ours, it’s very difficult,” Johnston said.

“We are organizing 10 dishes to try to make the place go as it is.”

Luke Johnston says the rise in public health insurance has many music venues worried.(ABC News: Lillian Rangiah)

Australian Live Music Business Council (ALMBC) chairman Stephen Wade said The Zoo was not alone.

“These are not just three or four places – these are hundreds of places around Australia,” Wade said.

“When they go to get theirs the insurance related to people’s debts has been reorganized, they have been experiencing a huge increase – sometimes up to 1,000 percent more than they normally do, and there are some places that have not been able to get it at all. “

Documents seen by the ABC show that one property was booked for almost 10 times what it had previously paid.

Mr Wade said small and medium-sized establishments, without the capital to handle the increase, are trying to close.

Brisbane music venue The Zoo says rising insurance costs are adding to the pressure on the industry.(Credit: Zoo / Will Johnston)

“This place is the backbone of the industry,” Wade said.

“Every artist you can name – the biggest artists from Midnight Oil, INXS and the biggest Australian artists, all the way to our biggest artists who are taking the world – all these artists started in small places.

“It would be a disaster if the facility was forced to close or they couldn’t get insurance to go forward.”

Around the world, extreme weather conditions, financial markets and the lack of funds have created a “hard” market for insurance companies, with many losing the risk profile from their books.

Insurance Council of Australia (ICA) General Manager of Public Affairs, Mathew Jones, said the music venue was an unfortunate casualty.

“The risk of insurance rates and what we’re talking about is more dangerous than any other hobby,” he said.

“There’s alcohol, lots of people in crowded places, events happening at night and not during the day.”

A small space important to the music universe

As someone who spent a good part of his life around the music scene, former Powderfinger guitarist John ‘JC’ Collins disagreed.

“A concert hall is not a nightclub — it’s a different thing,” Collins said.

“The people who go to the club are not the people who go out until 3 in the morning – we all close at 11 or 12 during the week and 1 at the weekend.”

Powderfinger started playing to 50-capacity venues from Cairns to Adelaide and said these stages were vital to the music industry.

“We’ve got this little place and they’re stepping stones – you can’t just walk out of your room and start playing on the pitches,” he said.

Bass player from Powderfinger John Collins standing outside a concert hall in Brisbane.
Powderfinger bassist John ‘JC’ Collins fears smaller venues will struggle to stay open.(Issued: John Collins)

Now the owner of two major venues – Brisbane’s Triffid and Fortitude Music Hall – Mr Collins was able to avoid rising insurance costs, but he fears that smaller operators may not be so lucky.

“Some of the insurance prices I’ve seen are crazy and unsustainable in the forums,” he said.

ALMBC has been actively meeting with brokers and the ICA to find answers.

Sean Bemrose, general manager at Tony Bemrose Insurance Brokers, said the extent of insurance claims is determined through the courts – and any claims can cost insurers huge.

“For the most part, insurers continue to see premium returns and fewer are making a profit on their products,” he said.

“Due to past losses, a number of insurers have also stopped providing public liability insurance to certain areas of the hospitality industry.

“Most of the insurers have decided to leave the market, which has to do with money.”

Encourage group discussions

With venue owners, musicians, bookers, managers, talent scouts and other professionals coming to Bigsound today, Mr Wade hopes to get the venue owners to come together and negotiate together with insurers to make it a success.

Australian Live Music Business Council Chairman Stephen Wade
Stephen Wade says hundreds of communities in Australia are facing uncertainty because of rising wages.(ABC News: Gregory Heap)

More than 100 sites have expressed their interest so far.

“We have the opportunity, with the purchasing power, that we can communicate with the insurers and hope to return to this place and give them an opportunity – and most importantly, I hope to get them insurance that will help them to continue working,” Mr Wade said.

He added that ALMBC has also been working with the ICA to help venues learn how to “take risks” in their dances.

Mr Wade said the ALMBC hoped the information, which would also be hosted at Bigsound, would support local efforts to get better value for their payments.