As Bigsound kicks off in Brisbane today, music venues still reeling from the impacts of pandemic lockdowns are hoping to celebrate a triumphant return to live performances but skyrocketing insurance premiums have heralded a new crisis for the industry.
Performance venues have been slapped with massive premium increases this year and some have been denied coverage all together.
Owners of Brisbane hot spot The Zoo said their premiums jumped sharply when they were assessed in March.
Nestled among the nightclubs of Brisbane's Fortitude Valley nightlife precinct, the 30-year-old venue has played host to some of Australia's most iconic rock outfits, from Powderfinger and Regurgitator to Nick Cave.
The Zoo paused all gigs at its 440-person dancefloor in 2020.
Co-owner Luke 'Boo' Johnston has been searching for ways to stay afloat, including opening a speakeasy next door to make up for lost gigs, but any unexpected costs threaten to send The Zoo under.
"For a venue like us, it's a break-even situation at best," Mr Johnston said.
"We're basically balancing 10 plates to try and keep the place going as it is."
Australian Live Music Business Council (ALMBC) chairperson Stephen Wade said The Zoo was not alone.
"This isn't just three or four venues – this is hundreds of venues around Australia," Mr Wade said.
"When they've gone to get their public liability insurance renewed, they've been faced with huge increases — sometimes up to 1,000 per cent above what they would normally do, and there's some venues that just haven't been able to get it at all."
Documents sighted by the ABC show one venue was invoiced nearly 10 times their previous premium.
Mr Wade said small and medium venues, without the capital to weather the hikes, were weighing up whether to shut down.
"These venues are the absolute bedrock of the industry," Mr Wade said.
"Every artist you could name — the greatest artists from Midnight Oil, INXS and iconic Australian artists, all the way through to our current huge artists that are taking over the globe — all of these artists start in small venues.
"It would be cataclysmic if these venues were forced to shut down or weren't able to afford insurance to move forward."
Globally, increasing weather events, financial market conditions and scarce capital had created a "hard" market for insurers, with many shedding more risky prospects from their books.
Insurance Council of Australia (ICA) general manager of public affairs, Mathew Jones, said live music venues were an unfortunate casualty.
"Insurance prices risk and the activities we're talking about are inherently riskier than other types of leisure activities," he said.
"There's alcohol involved, large numbers of people in tightly packed venues, activities taking place at night rather than the day."
Small venues vital to music ecosystem
As someone who spent the better part of his life around music venues, former Powderfinger bass guitarist John 'JC' Collins disagreed.
"Music venues aren't nightclubs — they're completely different things," Mr Collins said.
"People who go to music venues aren't necessarily the people going out until 3 o'clock in the morning – we all shut by 11 or 12 o'clock most weekdays and 1am on weekends."
Powderfinger started off playing to rooms of just 50 people from Cairns to Adelaide and he said those stages were vital to the music ecosystem.
"We have all these small venues and they're stepping stones – you can't just go out of your living room and start playing stadiums," he said.
Now the co-owner of two larger venues — Brisbane's Triffid and Fortitude Music Hall — Mr Collins has managed to avoid a rise in his own insurance premiums, but he fears smaller operators may not be so lucky.
"Some of the insurance prices I've seen are crazy and unsustainable for venues," he said.
The ALMBC has been urgently meeting with brokers and the ICA to find solutions.
Sean Bemrose, managing director at Tony Bemrose Insurance Brokers, said public liability insurance claim amounts were determined through the court system – and every claim has the potential to take a heavy toll on an insurers' margins.
"Generally, insurers continue to see costly claims and fewer are getting a return on their investment," he said.
"Due to previous loss experience, a number of insurance providers have also ceased offering public liability insurance cover to certain sectors of the hospitality industry.
"A number of insurers have chosen to leave the market, which has a flow-on effect to costs."
Push for collective bargaining
The issue is top of the agenda for ALMBC at the southern hemisphere’s biggest industry gathering, Bigsound, which kicks off in Brisbane today for the first time since 2019.
With venue owners, musicians, booking agents, managers, talent scouts and other professionals converging for the conference today, Mr Wade hopes to convince venue owners to come together and collectively bargain with insurers for a fairer deal.
More than 100 venues have indicated their interest so far.
"We have the option, with some buying power, to be able to approach those insurers and hopefully go back to these venues and give them some scope — and most importantly, hopefully get them some insurance that will enable them to continue to operate," Mr Wade said.
He said the ALMBC had also been working with the ICA to help venues learn how to "de-risk" their dancefloors.
Mr Wade said the ALMBC hope that an app, also to be launched at Bigsound, will bolster venues' efforts to get a better price on their premiums.
Mr Wade said he hoped the two measures would stave off the crisis for now, but the industry needed national reforms to secure the future of live music in Australia.
"Compare it to motor vehicle claims and other kinds of industries where there's usually a kind of standard type of payment that everybody understands and is legislated by government across those areas," he said.
"One of the things about public liability insurance – throughout live music venues and other associated kind of areas – is that there is no limit on claims.
"They tend to be very, very large and they can be quite drawn out, and it can be quite a period of time before someone even puts one of those in.
"Coming out of the back of COVID, coupled with those types of scenarios, we've seen a great reticence for Australian insurance to want to undertake that type of insurance."
Mr Jones said a range of policy solutions could be taken to government.
In the meantime, Eliza Klatt and Kurt Skuse from up-and-coming Pottsville band Eliza and the Delusionals are pinning their hopes on The Zoo's doors staying open.
"It's a whole community — it's so much more than just a venue … coming to a venue is literally like coming to your second home," Mr Skuse said.
