Music venues struggling to renew commercial liability insurance

The lack of insurance could lead to evictions, venue operators warn

Music venues struggling to renew commercial liability insurance

Commercial Solutions

By Lyle Adriano

With many businesses already taking a huge financial hit due to the COVID-19 pandemic, a coalition of live music venues in Toronto is calling on the Ontario government to look into why they are being denied commercial liability insurance coverage.

In Toronto, many commercial leases include a clause that requires commercial liability insurance – without it, landlords could evict music venue businesses. But as the pandemic situation evolved, many insurers have become hesitant to renew the insurance coverage of live music venues, putting operators at risk of closing down their businesses for good.

“Live music venues in Ontario are facing unprecedented hardships due to the COVID-19 pandemic,” said Shaun, owner of the Baby G and the Garrison, in a press release. “In addition to 100% loss of revenue now over six full months, permanent loss of valued employees and lack of resources/funding to cover basic operational costs, as an industry we are now facing an unparalleled crisis in regard to commercial insurance.”

“Commercial insurance rates for live music venues have risen between 200-400% over the last 10 years,” Bowring explained. “Now, the unregulated insurance industry in Ontario has presented… predatory practices making it near impossible for many in our industry to continue operating our businesses.”

Bowring, who is part of the live music operators group Love You Live, added that many other venue operators are experiencing similar issues – their insurance policies are nearing the end of their terms, and their insurers are denying renewals. He also said that many operators have spoken to multiple brokers and looked into other insurers, but so far have found no-one willing to provide insurance.

“They’re saying their renewals are at rates three times higher, which is tough,” Stephen Reid, owner of Dakota Tavern and another member of Love You Live, told NOW Magazine.

Reid mentioned that the coalition has been meeting with government officials and the insurance industry over the past two months to find out why insurance is being denied to music venue operators and what can be done to address it.  Although Love You Live received support from the city, insurance concerns fall under the purview of the Ontario provincial government. And the coalition has called out the lack of provincial regulation over commercial insurance.

“I understand there’s much bigger things going on, lots of sectors hurting, but we’re one of them too,” said Bowring. “We’re entrepreneurs and small businesses and we have jobs depending on us.”

The Ontario government confirmed that it has been in talks with the venue operators, and that it has encouraged businesses to work with their insurers to ask for premium relief measures or mid-term adjustments.

“We want to assure you that this government has been in regular contact with the insurance industry to raise issues concerning insurance availability and affordability during the pandemic, especially for small-business owners,” added Ontario Ministry of Finance spokesperson Scott Blodgett in a statement.

Insurance Bureau of Canada (IBC) director of consumer and industry relations Pete Karageorgos said that the COVID-19 pandemic impacted insurers just as severely as it did other businesses.

“Like businesses, insurers are grappling with new financial challenges,” he said. “They might not be willing to assume the same amount of risk.”

Karageorgos suggested that music venues should shop around as much as possible and negotiate.

“Even if you get a letter saying, ‘We’re not renewing you,’ ask if there’s anything you can do to adjust the deductible limit or highlight to the insurance provider that you’re a good risk, that you’re conscientious,” the director said. “At the end of the day, insurance companies want to support their clients. It’s in their best interests to make businesses succeed.”

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