Australia’s amusement, leisure and recreation sector is facing an insurance crisis which could force many attractions out of business.
At the heart of the problem are soaring insurance rates – in some cases increases in premiums of 200 percent – and in other instances a point-blank refusal by insurance companies to provide attractions with the cover that they are legally required to have.
“There is a clear and present danger facing the amusement and recreation sector because an inability for these businesses to get insurance cover means that many of the attractions people know and love won’t be able to operate,” Small Business and Family Enterprise Ombudsman, Bruce Billson, warned.
He has today released an interim report into the crisis facing the amusement, leisure and recreation industry in Australia.
“The lack of insurance coverage could lead to the closure of businesses … significant job losses (particularly in regional areas), stranded assets and loss of economic activity generated by metro and regional shows and amusement parks,” Billson said.
The report, entitled The Show Must Go On, explores whether a Discretionary Mutual Fund (DMF) can be a solution and discusses required legislative reform by states and territories to ensure it is ‘fit for purpose’.
It also highlights the need for such a DMF to be recognised and accepted as a suitable solution by local councils and showground managers.
Billson said the interim report seeks urgent feedback from all stakeholders by 3 November to the ideas and questions raised in the document.
“As businesses look to re-open after lockdowns, this issue is a shattering blow for those small and family businesses in the amusement, leisure and recreation sector which will be forced to stay shut because they can’t get insurance,” he stated.
“There is a very real possibility shows won’t go on; something has to be done for the show to go on. A DMF may represent the only workable solution.”
The interim report found the lack of affordable insurance was not the fault of the amusement industry but due to a ‘hardening’ in the global insurance market. Very few insurers were willing to insure the industry and premiums – when available – had risen significantly.