The nation’s amusement, leisure, and recreation sector is facing an insurance crisis that could force many of our best-known attractions to shut their doors due to a lack of adequate cover.
An interim report commissioned by the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, describes a “clear and present danger” to the sector. Billson says the inability to get insurance coverage will cripple the industry.
Insurance issues could kill amusement industry
“The lack of insurance coverage could lead to the closure of businesses in the amusement and leisure sector, significant job losses (particularly in regional areas), stranded assets and loss of economic activity generated by metro and regional shows and amusement parks.”
The report, The Show Must Go On, explores whether a Discretionary Mutual Fund (DMF) can be a long term solution and discusses required legislative reform by states and territories to ensure such a fund is ‘fit for purpose’.
The report also highlights the need for DMF to be recognised and accepted as a suitable solution by councils and showground managers.
Feedback needed from amusement and recreation sector
Billson said the interim report seeks urgent feedback from all stakeholders by 3 November to the ideas and questions raised in the report.
“We are calling for submissions from those in the industry so we can further understand any issues before we release a final report to government,” Billson said.
“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.
“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 ASBFEO has been reviewing a proposal by the Australian Amusement, Leisure and Recreation Association (AALRA) to establish a DMF as a solution to the critical and immediate need for insurance in the sector.
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 are willing to insure the industry, and premiums – when available – had risen by as much as 200 per cent.
“In many instances the policy is priced such that it may as well not exist because small operators have no capacity to pay for the cover they need to continue operating,” the report says.
“In the case of the amusement, leisure and recreation sector, there isn’t an offering that provides full coverage.”
Public liability insurance coverage is a legal requirement for the operation of rides at showgrounds and fixed installations, both through contractual obligations and obligations imposed on councils and other landowners by state and territory governments.
DMFs operate to provide cover on a discretionary basis to a group of individuals or organisations that have a similar risk profile. Under a DMF, members who meet requirements would have access to a certificate of protection, enabling them to operate these amusement rides.
You can read the Show Must Go On interim report here
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