A significant number of Melbourne hospitality businesses have suffered devastating arson attacks in recent months – with concerns the costly spree could start to affect insurance.

While echoing the firebombings of tobacconists, which caused an insurer retreat, this year’s spate of incidents is harder to explain due to a lack of obvious motive.

The attacks have recently extended beyond hospitality to businesses including car dealerships, with one targeted by three offenders who lit accelerant they had spread around the premises and on a McLaren sports car worth more than $500,000.

In response, Victoria Police has launched Operation Eclipse and arrested more than 50 people. Officers believe crime gangs are recruiting children to carry out the strikes.

The insurance industry is watching with interest, and Will Dunn, CEO of Melbourne-based brokerage domo, answered insuranceNEWS.com.au’s questions.

How significant is the spate of arson attacks that has hit hospitality venues in Melbourne in recent months? 

The current wave of arson attacks is shocking to domo, as a Melbourne-based insurance brokerage with many clients in the hospitality space. We’re so proud of our hospitality industry in Melbourne and we understand how hard the owners and their teams work to run their businesses. It’s devastating that these independent, local businesses are being targeted by criminals.

Has domo dealt with any noteworthy claims?

One of our clients has been impacted by an arson attack recently. Thankfully, the damage was limited to the facade of their venue. We had loss adjusters on site within 24 hours and were able to complete repairs without any impact on our client’s trading capacity.

What can businesses do to prepare, from an insurance perspective?

It’s important in the current environment that brokers and clients are well organised with their renewals and take the time to clearly highlight the risk protection measures they have in place at their venues. At domo, we have supported a number of our hospitality clients to:

• Review their limits and declared values to ensure they have adequate protection in place, particularly from a fire and resultant business interruption perspective.
• Highlight risk protection measures they have in place, particularly security controls and fire protection infrastructure.
• Renew their policies while containing premium and deductible increases.

What impact are the attacks likely to have on premiums, for the businesses affected but also the broader sector?

If the current situation continues, it will become increasingly difficult and expensive for hospitality businesses to obtain fire insurance protection. 

Are insurers growing wary of Melbourne-based businesses due to more general crime concerns?

Certain insurers have withdrawn quotes or declined to provide quotes to Melbourne-based hospitality venues, due to the recent arson activity. This response has so far been isolated and insurers that specialise in offering ... solutions for hospitality clients have been quite measured in their reaction to the current situation.