Latest News

Back to Latest News back

 

Industry operators impacted by rising insurance premiums

Industry operators impacted by rising insurance premiums
November 16, 2020

Beyond the challenges presented by the Coronavirus pandemic, 2020 is also seeing operators across the leisure industry facing major issues of insurance availability.

Australasian Leisure Management continues to hear of operators across the industry encountering policy denials and soaring premiums, with attractions, recreation and tourism being particularly hard hit.

The Australian Amusement, Leisure and Recreation Association (AALARA) has recently informed members “as many of you know first hand (insurance) … is becoming more difficult by the day to obtain public liability protection within our industry. With many operators being refused cover entirely.

“AALARA believes this situation is only going to get worse in the future.”

A recent survey on business insurance by the Australian Industry (Ai Group) generated comments including:

“The insurance market is now to the stage where you will have no choice but to be uninsured. There is simply no market to get a quote in some circumstances.”

“We had to resort to using overseas insurance companies at exorbitant premiums. These are not licensed in Australia.”

“The excess went from $100,000 to $250,000 and the premium from $224,000 to $757,000.”

With the Australian Small Business and Family Enterprise Ombudsman called an inquiry earlier this year to investigate insurance practices and cover availability after receiving complaints about policy denials and soaring prices, businesses including adventure and outdoor operators, caravan parks, hotels and trampoline centres have issued stark warnings on insurance availability during the current hard market in submissions to an inquiry.

As insuranceNEWS.com.au has reported, among the responses caravan park businesses and associations say that a lack of available insurance and spiralling prices could spell the end of a multi-billion-dollar industry which is a huge employer in regional areas.

The Caravan Industry Association of Australia’s submission stated “access to affordable and adequate insurance coverage is crucial to the ongoing viability of the sector.

“However, in recent years, caravan park operators are increasingly expressing their difficulties in obtaining coverage, excessively high premiums, limitations on policy extensions and reduced options in the market.”

Big4 Holiday Parks says areas with increased natural disaster risk are particularly hard hit.

Its submission noted “if this issue is not fixed in the next couple of years, it is likely that the industry will be brought to its knees with investment stopping and facilities and activities being removed.”

Tasmania’s Huon River Jet Boats told the inquiry that despite contacting about 40 underwriters not one was prepared to take on its risk, despite its excellent safety record.

Its submission stated “adventure tourism thrives in New Zealand but this is only because of the foresight of the New Zealand Government in creating the Accident Compensation Commission and providing business with a stable insurance environment in which it can operate.

“For adventure tourism to survive and thrive within Australia a similar system to that in New Zealand needs to be implemented.”

Western Australia’s Margaret River Busselton Tourism Association reports that many businesses have been “refused insurance”.

“The future of these professional tourism businesses is seriously threatened as they are unable to access or afford insurance for their operations. Specifically, the businesses affected either cannot get terms for cover, or face unaffordable increases in premiums, with the result that operations are no longer viable.”

The owners of Hamilton Island put forward a submission outlining a 300% insurance increase in four years from $1.7 million to $5.2 million.

It advised “over the past decade we have seen our own ability to obtain any insurance cover from the Australian market whittle to zero.

“In recent years we have been required to place our insurance in the London market.”

They join other Queensland submissions in calling for further investigations into a government-backed cyclone reinsurance pool.

Commenting on responses received Australian Small Business and Family Enterprise Ombudsman, Kate Carnell advised “the feedback we’ve had from small businesses so far has been insightful and concerning, with many small businesses claiming to have been denied insurance outright.”

The Ai Group survey report Business Insurance: Unaffordable or Unavailable?, reveals that “insurance stress” is increasingly an issue.

Respondents advised that in seeking insurance cover, the most common type sought was public liability (89.2%), followed closely by workcover (87.3%) and property insurance (81.4%).

More than half (53.3%) of the respondent businesses reported “unusual trouble” obtaining insurance, while 42.1% reported no problems.

The most common issue was high growth in premiums (reported by 55.6% of businesses with problems seeking insurance). Coverage being too limited was reported by 14.8% and “inability to obtain desired insurance at all” by 13.6%.

Some businesses reported multiple problems. The most common “other” problem reported was a reduction in competition, with fewer insurers offering relevant cover.

The report also investigates the reasons behind the hardening market with climate change and the increasing severity and frequency of natural catastrophes identified as factors which are contributing to rising reinsurance costs - which are then passed to consumers.

Images: Jumping Pillow at the BIG4 Grampians Parkgate Resort (top), Huon River Jet Boats (middle) and a pool at Hamilton Island (below).

About the author

Nigel Benton

Co-owner / Publisher, Australasian Leisure Management

Nigel Benton is the co-owner and publisher of Australasian Leisure Management, Australia and New Zealand’s only magazine for professionals in all areas of the leisure industry. Having established the magazine in 1997, shortly after his relocation to Australia, he has managed its readership rising to over 11,500 and its acceptance as the industry journal for professionals in aquatics, attractions, entertainment, events, fitness, parks, recreation, sport, tourism and venues.

As of 2020, he has launched the new Asian Leisure Business website.

Among a range of published works and features, his comments on a Blog (blogspot) from 2007 to 2011, when this website went live in its current form, may be interesting to reflect back on.

Click here to connect with him via LinkedIn.

Read more from this author

Related Articles

10th November 2020 - Victorian attractions and waterparks look to reopening from this weekend

13th November 2020 - ARV water safety award success for Western Leisure Services

22nd October 2020 - Festival promoters call for Federal Government insurance scheme

16th October 2020 - NSW police conduct Operation Bathurst during Bathurst 1000 to ensure event and patron safety and security

9th October 2020 - ASSA launch new water safety campaign

10th September 2020 - Ballarat Council advises outdoor pools to undergo safety procedures before reopening

4th September 2020 - WTTC launches Safe Travels protocols for adventure tourism

25th August 2020 - WhiteWater World prepares for reopening with refurbishments and rigorous safety program  

19th August 2020 - ISO advises of update to adventure tourism standards

11th August 2020 - Royal Life Saving publishes new National Swimming and Water Safety Framework for learn to swim programs

21st July 2020 - Blacktown City Council partners with NRMA Insurance to shade playgrounds

25th June 2020 - Interest in domestic tourism results in increased caravan sales

12th June 2020 - Insurance refusals impacting adventure tourism operators

27th May 2020 - AALARA releases guide for the reopening of Australia’s attractions industry

25th March 2020 - Travellers look to stay on in Australia’s caravan parks

12th March 2020 - New national guidelines for guided outdoor adventure activities

24th December 2019 - Caravan and camping visitor expenditure reaches $7.9 billion, exceeds 13 million trips

28th June 2019 - Ardent Leisure facing potential $80 million liability in wake of Dreamworld inquest

11th May 2019 - Australian Fit-Tech Startup GYYMI now offers insurance for personal trainers and clients

15th September 2018 - Commercial trampoline centre operators struggle to secure insurance

27th June 2016 - Climate change a massive threat to global heritage and tourism

24th November 2015 - Qantas and nib combine to link to health insurance with activity rewards

19th May 2015 - Perisher Blue escapes liability for skier’s injury but needs a new disclaimer

9th April 2015 - Australian Chamber of Commerce and Industry backs campaign for a fitter tax system

30th December 2014 - Queensland entrepreneur launches new adventure tourism insurance company

13th November 2014 - Rolling Stones battle insurance underwriters over for $12.7 million tour cancellation claim

25th July 2014 - NRL commits to new player insurance scheme

28th May 2014 - AudienceView clients to offer ticket insurance to customers

22nd February 2014 - Attraction ordered to pay $4.6 million to quadriplegic for jumping pillow injury

9th September 2011 - Amusement operator fined $30,000 following prosecution by Fair Work Ombudsman

13th October 2010 - Australian golfers and clubs benefit from new insurance program


Asking a small favour
We hope that you value the news that we publish so while you're here can we ask for your support?

The news we publish at www.ausleisure.com.au is independent, credible (we hope) and free for you to access, with no pay walls and no annoying pop-up ads.

However, as an independent publisher, can we ask for you to support us by subscribing to the printed Australasian Leisure Management magazine - if you don't already do so.

Published bi-monthly since 1997, the printed Australasian Leisure Management differs from this website in that it publishes longer, in-depth and analytical features covering aquatics, attractions, entertainment, events, fitness, parks, recreation, sport, tourism and venues management.

Subscriptions cost just $90 a year.

Click here to subscribe.

 

supplier directory

The Complete Guide to Leisure Industry Products & Services.

See the directory see all

COMMERCIAL AQUATICS AUSTRALIA

Commercial Aquatics Australia provides aquatic solutions nationwide and is one of the largest and most experienced companies specialising in the design, construction, renovation, service, maintenance…

read more

Aquatics / Design / Play / Waterparks

 
 

GLADSTONE MRM

Gladstone Health & Leisure (Gladstone MRM Pty Ltd Australia) is a leading supplier of leisure management and fitness software and is endorsed by leading health and fitness professionals and…

read more

Access / Billing / Fitness / Technology / Venues

 
 

SWIMPLEX AQUATICS

Swimplex Aquatics are a world-class company dedicated to the commercial pool, waterslide industry. We are Australian market leaders servicing all states Australia wide. Swimplex provide a full…

read more

Aquatics / Attractions / Design / Play / Waterparks

 
 

Augmented Creative

Augmented Creative is an open organization of like-minded and highly dedicated, creative people who conceive, plan and execute visual solutions. We pursue new and innovative visual ideas to help…

read more

Arts / Attractions / Consultants / Design / Tourism

 
 

Spill Station Australia

Compliant chemical storage and decanting solutions. Includes spill kits, spill containment pallets, chemical decanting decks and safety shower and eyewash equipment. See our full range of solutions

read more

Aquatics / Safety / Security / Venues

 
 

SeatGeek Asia Pacific

SeatGeek is a search engine and mobile-focused ticket marketplace that allows fans to buy and sell tickets for live events. As of August 2018, SeatGeek has exited the Australian, New…

read more

Entertainment / Sport / Technology / Ticketing / Venues

 
 

Pico Play

Pico Play is a global leader in the planning, design, development and construction of world-class themed attractions and entertainment that deliver extraordinary and memorable experiences to millions…

read more

Attractions / Consultants / Design / Recreation / Tourism

 
 

Smart Connection Consultancy

Smart Connection Consultancy is a boutique sport and recreation consultancy who has become one of Australia’s leading advocates for the use of synthetic sports surfaces as a vehicle to grow…

read more

Consultants / Recreation / Sport / Surfaces

 
 
 
 

get listed with our suppliers directory

Get your business noticed in our targeted directory. Viewed by 10,000 industry professionals per week!

list your business