On the tail end of two horror years in the hospitality business, Adelaide clubs now face public liability insurance price hikes.
One Adelaide club has had to shut while another had to scramble to find affordable insurance.
Sugar nightclub owner Driller Jet Armstrong told the ABC that the only way he could afford to reopen was with crowdfunding.
He said the first insurance quote he was given by a local broker was $305,000 — 10 times what the club had been paying.
“Which is basically a quarter of our growth turnover, and obviously that’s a ‘go away’ quote.
“I turned from one broker to another here in South Australia when I couldn’t get insurance and they ended up saying to me we will never, ever get insurance.
“In desperation, I rang a friend who put me onto a broker in Sydney, who four weeks after I contacted him, managed to get a policy for us, an affordable policy.
“Our policy cost us $32,000 a year for 20 years of the venue’s operation, and now our cost is $88,000. Which of course, after being closed for eight months, we’ve basically exhausted all of our bank account, which was $200,000.
“And we had to start a GoFundMe campaign, and it’s only the money from the GoFundMe campaign that has managed to keep us afloat long enough to open our doors,” said Armstrong.
Insurance expert Allan Sudale from Reliance Partners agrees that it’s getting tougher to secure public liability insurance in licensed venues.
Sudale said: “What can help is giving your broker enough lead time to assist, providing a risk management plan, current Profit and Loss statement, staff procedures and plan of management. Insurers are no longer just accepting a proposal form by itself. The broker and the client need to show the insurer the venue is safe and that they have security in place.
“My pub and club insurance helps hospitality owners with their insurance and risk needs. We take the time to review the risk and search for insurer options that are right for them,” said Sudale.
Live music venue The Grace Emily, also in Adelaide, has now closed after failing to secure insurance. Owner Symon Jarowyj told ABC that he hoped it would be temporary,
“Basically my broker for insurance got given two weeks’ notice from my insurer that they wouldn’t be renewing our public liability policy, which is legal, but two weeks to find a public liability policy in apparently a high-risk market … just didn’t give my broker enough time to get something over the line,” he said.
Jarowyj said the cost of public liability insurance was “getting higher and higher each year”.
“The problem is the insurer that I did have didn’t even offer an extension until we found a new policy,” he said.
Jarowyj said he expects that this problem will start to affect other venues in the near future.