The Barra Fun Park in Townsville has closed its doors after 20 years of operation after failing to find an insurer prepared to renew its public liability insurance.
The popular attraction halted operations at the end of January after owner Brent Stevenson found insurers unwilling to offer cover, a result of insurers finding many sectors of the leisure industry becoming "financially unviable" for global markets.
Advising that he'd spoken to multiple brokers, Stevenson stated "no insurers are willing to take the business on.
“Everything that I have worked for, the sacrifices that my family and I have made are being taken away for no reason.
"It’s very upsetting, this has been who I am for the past 20 years."
The family-owned attraction, located 20 kilometres south west of Townsville, offers an inflatable aquatic playground, cable water skiing and a fishing lake.
Its closure, which Stevenson hopes will be temporary if a solution to the insurance crisis can be found is indicative of the situation many attractions, adventure tourism operators and holiday parks are finding with massive rises in premiums or the complete inability to secure insurance.
With the industry closed for much of 2020 due of Coronavirus, the issue has been described by one operator as being a crisis that will “kill tourism.”
The crisis was highlighted in the Small Business Ombudsman’s Insurance Inquiry Report, release in December, which called for urgent action to address what it describes as "widespread market failure" over the availability and affordability of insurance products for small businesses.
On the report's release, Australian Small Business and Family Enterprise Ombudsman, Kate Carnell stated “we are in the grip of a national crisis that is killing small business."
More recently, Carnell told Insurance Business Australia last month "Brent Stevenson cannot find an insurer willing to renew his public liability insurance. In the two decades Barra Fun Park has been operating, there has only been one insurance claim against his business. The claim resulted in a $70,000 payout to a patron who sustained an injury (hyper-extended thumb) at the park. Brent subsequently saw his insurance premium nearly triple and paid the annual fee, only to be shut down for six months due to COVID restrictions."
“This is not just one isolated incident - we know there are many small businesses, particularly those offering recreational activities such as caravan parks with splash zones and jumping pillows, that are in the same boat.
“That’s why our insurance inquiry has made recommendations addressing the lack of availability of public liability insurance, which is in large part attributable to the unlimited nature of injury claims and the potential for large damages to be awarded.”
Seeking a solution, Stevenson has joined with Townsville City Council to launch a petition calling on the Federal Parliament to liaise with the Small Business And Family Enterprise Ombudsman to develop a solution to the insurance crisis and make insurance attainable for all small businesses.
The petition states “we believe that insurance companies should not be given the freedom to exclude business by their definition of ‘high risk’."
The petition expands on one of the key recommendation within the Insurance Inquiry Report that states that “where there is only one or no insurers left in a professional indemnity market, the Federal Government should provide an insurance scheme of last resort for small business”.
An earlier petition on change.org generated over 5,500 signatures.
Within the industry, the Queensland Tourism Industry Council (QTIC) is undertaking a project that seeks to identify the specific issues of concern in relation to insurance for tourism businesses.
Aimed at businesses both in Queensland and across the country, the goal of the project is to identify and highlight the challenges faced by all parties and in turn explore potential solutions to improve financial and operational viability of all businesses involved.
Going further, the Australian Amusement, Leisure and Recreation Association (AALARA) is looking to its stakeholders in seeking to establish a member owned, Discretionary Mutual Fund (DMF).
DMFs offer ‘discretionary cover’, an insurance-like product that may involve an obligation on the DMF to consider meeting a claim.
AALARA is looking to work in conjunction with an Australian Financial Services Licence Holder to commence an industry DMF, which, it says “would be owned by the members, run by the members, for the benefit of all members”.
Australasian Leisure Management Publisher Nigel Benton addressed the crisis in insurance in the latest issue of the printed magazine.
Click here to read Australasian Leisure Management issue 142.
To view Brent Stevenson’s petition to 'Make public liability insurance attainable for all small businesses' on the Australian Parliament House website go to www.aph.gov.au/publicliabilitypetition.
The petition can be signed up to 3rd March 2021.
Images: The Barra Fun Park (top and below) and owner Brent Stevenson in happier times (middle). Credit: Barra Fun Park/Facebook.
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