Victoria is the only state so far to launch an insurance package for the broader event industry. However there are numerous aspects that question whether it is just a political stunt to look like they are supporting the sector as opposed to really providing a safety net and ensuring the longevity of the industry.
It can be distilled down to two main aspects.
Who is actually able apply for the insurance, as it seems not all “events” can, and the cost of the cover.
And secondly the conditions on making a claim.
Victoria released their scheme last year and a number of operators who have takin it up now realised it may be worthless. Plus there is confusion about who is eligible to take it out!
NSW carried out numerous consultations and were supposed to release their insurance cover prior to closing in 2021, it still hasn’t materialised.
Presently the other states and territories don’t seem to have any insurance scheme in place.
The schemes are intended to incentivise organisers of events to proceed with confidence and assist with the rebound, however this insurance does little to tackle the confidence of a marketplace.
From a top line perspective the insurance was available if an event was unable to proceed due to covid, border closures, attendance ratio changing affecting the total numbers, changing state health orders etc.
What it never allowed for was a covid outbreak that directly affected the confidence of a marketplace where the organiser was compromised between commercial exhibitors and visitors advising non-support or dwindling commitment to make it viable, floor space or buyers.
And in the case of the Tamworth Music Festival, where they have incurred all the costs to set it up but now have postponed to later in the year how does this insurance help really? Spending on staff, suppliers, promotions, etc would never be fully recovered.
There are other concerns with the scheme, the organiser has to take out the policy and therefore the risk but how does that support suppliers and invested parties?
Under Victoria’s scheme it’s a percentage of the total dollars you want to cover, so let’s use $2 million as the total amount we want to cover, then the premium costs $80,000.
Based on covid shutting down the event the organiser can make a claim but where it gets messy it seems they would be the sole arbitrator of who else gets part of the payment. If venues transfer bookings at no penalty and if the organiser says the suppliers haven’t incurred costs some organisers could earn more from the insurance than running the event. YET the whole industry isn’t protected. It’s not clear if you don’t list the official suppliers and venue and what part of the payout they would get but in yet another loophole it doesn’t protect the custom stand builders of stands if they don’t form part of the policy upfront, and some organisers could take the stance well I put the insurance cover up so it’s mine!
Let’s focus on the goal of event insurance, it was devised to give confidence for events to proceed and rebound not try to replace profit.
Maybe for the good of the whole industry there is a better way, and it goes to previous points I have raised around governments seeking advice from industry associations.
The insurance schemes seem to be reactive to what was, however covid is evolving and changing so we have to need to move on and rather than Band-Aids we need to develop a longer term plan that allows the whole sector to move forward to a more pointed cure.