Shows, festivals, and school fetes could be relegated to history if an escalating insurance crisis is allowed to continue devastating amusement operators.
Businesses that own amusement rides and attractions are sounding the alarm about a staggering hike in insurance premiums that could force them to shut their doors.
The Australian Amusement, Leisure and Recreation Association estimated businesses’ insurance premiums have soared by an average of 300 per cent in the past few years. Some operators have reported being stung with price hikes of 750 per cent, according to the association.
The association said Australian theme parks’ insurance prices had increased tenfold, from $150,000 four years ago to a dizzying $1.5m.
Australian Amusement, Leisure and Recreation Association general manager Kristy Ahrens said the situation is unsustainable.
“The insurance crisis is having a devastating effect on our industry, especially amongst smaller operators who are experiencing an inability to gain insurance,” she said.
“Some operators have been unable to achieve any insurance at all. This has resulted in amusement rides excluded from events, sitting idle in theme parks or in sheds across the country.”
While prices have been sharply rising for the past few years, Ms Ahrens said the association noticed that insurance premiums increased even further after a tragic accident highlighted the risks of amusement attractions.
In December last year, six primary school children were killed in Tasmania when a jumping castle was lifted into the air by a sudden gust of wind. The horrific accident prompted the Tasmanian Education Department to ban the use of jumping castles at public schools around the state.
Following the tragedy, the AALARA noted that costs rose again. With only one insurer for the entire amusement and leisure industry, businesses have no choice but to pay the eye-watering premiums to protect themselves.
Showmens Guild of Australasia president Aaron Pink said some operators were having to reduce the amount of rides they offered.
“Most companies are only insuring part of their fleet, as some items are just not financially viable,” he said.
“The biggest impact we are seeing (is that there) are not enough rides to accommodate all the regional shows through lack of equipment being insured.”
The insurance crisis has a chokehold on the industry that employs more than 7000 people and contributes more than $1.84bn to the economy.
“As an industry we employ thousands, entertain millions and mean so much to so many,” Ms Ahrens said.
“Our members provide the attractions that underpin Australia’s tourism industry, they provide the amusement rides at agricultural shows and local school fetes which are such important community events.”
On October 20, small business and family enterprise ombudsman Bruce Billson released a report warning that insurance prices posed a “clear and present danger” to the leisure industry.
“There is a very real possibility shows won’t go on – something has to be done for the show to go on,” he wrote.
“This inability to secure public liability coverage puts thousands of jobs at risk and means many of the attractions people know and love are on the brink of being a thing of the past.”
Mr Billson maintained an industry-created mutual discretionary fund would be the only practical and sustainable solution to the issue.
The fund would allow businesses with common risk profiles to pool their money to meet financial risk obligations and manage claims.
Mr Pink said it was “the only solution to (secure) the long-term future of the industry, as this is the worst insurance crisis we have ever faced”.
The AALARA will be meeting with government officials in the coming weeks to discuss a loan to implement the industry-saving fund.
“We have jumped through many hoops, invested significant member funds and completed all the required due diligence, and we are confident that a discretionary mutual fund is the only option for the long-term survival of the amusement, leisure and recreation industry in Australia,” Ms Ahrens said.
“We really hope that the Labor government truly values what our industry means, not only to the economy and employment of Australia but moreover what we contribute to the culture of Australia.”
The Insurance Council of Australia has been contacted for comment.
This content was originally published here.