Music festival promoters are calling for a government backed insurance scheme to protect against future cancellations.
The push for government support follows a tumultuous year for festivals which have copped massive losses after being forced to cancel due to the ongoing restrictions.
Speaking to the ABC News, Bluesfest director Peter Noble said putting on an event was a “huge risk” in the current environment. Noble had to cancel this year’s music festival in Byron Bay, despite having sunk around $10 million into marketing, artist deposits, flights and accommodation, booked suppliers and 30,000 sold tickets.
Bluesfest had cancellation insurance that included pandemic risk which he described as “a godsend for us”.
“All it meant was our ticket buyers were insured,” he said. “It didn’t cover our profit or creditors. It covered that our ticket buyers would get their money back.”
But other festival promoters were so not fortunate, with Groovin the Moo’s insurance not covering communicable diseases.
Groovin The Moo general manager Kathryn Holloway told ABC News the result of the cancelled festival was “a huge financial loss and emotional loss”.
“In terms of finances, there was all the costs that are sunk that you can’t recoup,” she said.
“By the time we refunded tickets to patrons as well, the losses were substantial.”
However, specialist insurance broker Ian Stack says the result of the current situation means major events can no longer get coverage for communicable diseases.
“Unfortunately now that COVID-19 is a known risk, all the insurance companies are actually excluding communicable disease and not allowing it to be bought out,” he told ABC News.
“It’s virtually impossible at the moment to get cover for that risk.”
While some festivals are looking at returning in 2021, they are “second guessing themselves at the moment”, according to Stack.
“If the promoters are going to run events, they’ll have to look at non-insurance ways to protect their exposure,” he said.
Noble has called on the Federal Government to underwrite the risk so that major events can go ahead.
“Nobody wants to spend $10 million to find that on the day they can’t open their gates,” he said. “We’ve all been through that once. We don’t want to go through it twice.”
Holloway said the industry is facing the double whammy of increased insurance premiums and no coverage for communicable disease as part of their policies.
“That means there’s a gap and no safety net for the promoter,” she said.
“We could suffer a massive loss and even more jobs will be lost, that would be completely catastrophic.
“The government needs to step in and provide us with an interruption fund.”