A Melbourne live entertainment venue has called on the federal government to introduce a statutory scheme for the sector due to public liability insurance market failure.

Pride of our Footscray says it has not had a claim since opening in January 2018, holds a top five-star liquor licence and has introduced safety measures that sacrifice revenue, but in 2024 its broker could source only one quote for $142,890, or $157,179 once financed – up from $6270 in 2020. 

Another 18 insurers declined to offer cover at any price, Pride CEO Mathew O’Keefe says in a submission to the parliamentary inquiry into small business insurance.

“The insurers have just shown no interest in our safety record, liquor licence status nor risk management techniques,” he says.

“Our experience illustrates a systemic market failure rather than a venue‑specific risk issue. Premiums and underwriting decisions have become disconnected from claims history, compliance status and demonstrable risk controls.”

The venue, which has a licensed capacity of 200 people, hosts drag, cabaret and burlesque artists, plus stand-up comedy, film, poetry, art classes, trivia, theatre and live music.

Mr O’Keefe says insurers have withdrawn from the market “by stealth”, without informing the government or industry they were about to deny access to mandatory products. 

“Basically, insurers are leaving the sector, while on the other side governments are trying to build back the arts and their night-time economies,” he says.

“The venues are wedged in the middle, with time running out, left alone to desperately try to sound the alarm about the failing insurance market.”

The submission says insurers “don’t want patrons dancing” and their approach discriminates against certain music genres, suggesting they would prefer “maybe a jazz trio or a string quartet”.

Pride also notes its building insurance, taken out by the landlord, was cancelled in 2023 due to tenant activities falling outside “underwriting guidelines”.

The submission says alternatives to a federal statutory scheme could include a discretionary mutual fund or a hybrid option involving the private market and a public backstop, with emergency bridging funds proposed to assist until there is a new arrangement.

Other recommendations call for further investigations into the issues, and the submission takes aim at insurers’ excessive caution.

“It may be best if the government places a nationwide ban on dancing, and we can all rest peacefully in the knowledge that ‘slip and fall’ incidents on dancefloors will be a thing of the past.”

Inquiry submissions are available here.