'Untenable' insurance policies could silence live music venues

The COVID-19 pandemic has already taken a big toll on Ontario's music venues, with several in Ottawa having closed their doors for good.

For those who've survived the lockdowns and capacity restrictions, however, there's now a new threat: many small-and-medium-sized venues are facing remarkably high increases in their insurance premiums.

"You can get insurance if you're willing to pay, in some cases — and this is not a made up number — 4,000 per cent higher than what you may have paid before," said Erin Benjamin, president and CEO of the Canadian Live Music Association, in an interview with CBC Radio's All In A Day.

"They're not all that high, but they're certainly higher than pre-pandemic amounts."

Many of those policies include conditions that are "simply untenable," said Benjamin, like only serving alcohol in plastic cups or closing by midnight. Some venues, she said, are forgoing full insurance policies, leaving them at risk of bankruptcy should something go wrong and they end up being sued.

It's also not just the music industry dealing with this reality, Benjamin added, but many other businesses in the tourism and hospitality sector.

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The exorbitant rates are being caused by a "perfect storm" of pandemic-related factors, said Danish Yusuf, an insurance broker and CEO of Toronto-based Zensurance.

"Insurance companies are telling us that claims are up, while at the same time, with fewer [businesses] being open, fewer are paying into the pool to then pay the claims. And so the few that remain have to pay more," Yusuf told All In A Day.

"And some insurance companies are leaving the market altogether. So the supply of insurance is also shrinking."

MPP write open letter

It's "frustrating" to see big Ontario insurers report billion-dollar profits during the pandemic while brokers and business openers "can't get commercial insurance arrangements that meet their needs," said Ottawa Centre NDP MPP Joel Harden.

Harden, whose riding contains numerous live music venues, said he'd written an open letter to Finance Minister Peter Bethlenfalvy calling on the Ontario government to take "immediate action."

Harden told All In A Day the "almost self-regulating" insurance industry either needs to provide competitive plans or be forced to do so by the government in power.

The live music industry has been working on this for 20 months, since the beginning [of the pandemic].- Erin Benjamin

"It's a warning to the industry: if you're not going to come to the plate and help brokers and small businesses, governments need to compel them to act," Harden said. "And an NDP government will."

Benjamin said for the moment, the live music industry isn't asking the province to step in and regulate commercial insurers, but rather put forward some sort of solution.

Her conversations with the Ford government, she said, have suggested they understand their plight.

"What we would really love is some help," she said.

"The live music industry has been working on this for 20 months, since the beginning [of the pandemic] to try and find some solutions directly with the insurance industry. We haven't been successful."