Pride Month is well underway, but Pride events in Toronto have been threatened by ballooning costs even before the annual festivities could begin.
Pride Toronto organizers reported seeing staggering 300% increases in their insurance rates this year. Coupled with a 150% rise in their security expenses, the team told Canadian media outlets that they were considering scaling back on events to the unexpected costs.
Brokers that spoke to Insurance Business said that the rises could be attributed to a current “hard market” in the events liability and entertainment insurance space, partly due to two large carriers – Allianz and Travelers – having pulled out of Canada around the COVID-19 pandemic.
“There are fewer insurance companies participating in the space and there's minimum premiums that often apply that are quite prohibitive if it's not a large-scale event,” said Peter Parkin (pictured directly below, president of Shephard Ashmore Insurance Services. “I think that's probably why they're seeing those increases.”
Parkin also stressed that any kind of alcohol liability also makes coverage “extremely expensive” for events.
A Vancouver-based brokerage recently acquired by Westland Insurance Group, Shephard Ashmore specializes in live event and music insurance. The firm works with many of the Pride festivals and parades across Canada’s West Coast. The brokerage helped place coverage for Victoria Pride Festival via Front Row Insurance Brokers, another Westland acquisition that Shephard Ashmore is integrating into.
The Victoria Pride Festival events had also seen a bump in their insurance costs, though Parkin could not confirm the amount. “I know that what we presented was quite competitive, and we ended up binding that coverage,” Parkin said of Victoria Pride’s insurance.
“What I'm seeing is that among people that are reaching out to us, if this is the first year they've come back after COVID, whoever they had placed their coverage with previously is either not in the market anymore or the costs are much, much higher,” Parkin said.
“It could be that the combination of some insurance companies pulling out of writing live events liability and the COVID-19 pandemic [is bringing up the rates].”
Higher risks associated with large-scale events and potential changes to Pride Toronto’s plans could also have contributed to their insurance bill, said Adam Mitchell (pictured directly above), CEO of Mitch Insurance, an Ontario-based broker that offers events liability insurance.
“Our deduction is that some things must have changed,” Mitchell said.
While he prefaced that there was no way to know why Pride Toronto saw such dramatic rate increases “without seeing their application or knowing what limits they're buying,” Mitchell pointed out that “some material points” must have changed that raised concerns with their carrier.
“How many different events are you hosting? What’s the size of each of the events? What’s the nature of these events, or how risky are they?” Mitchell asked. “It's going to be bodily injury and property damage that drives most of the liability.
“Adding a 1,000-person beer garden is also going to ramp up the liability and exposure,” the CEO continued, commenting on reports that Pride Toronto organizers were setting up a new 1,000-person beer garden, that police said contributed to the increased service fee.
“Perhaps they decided to increase, or the city required them to increase the liability limits. Could it also be that the event is getting significantly more popular, and attendance has grown in previous years, especially coming out of COVID-19?” said Mitchell. “Some combination of those factors would definitely add to the rate increases.”
Despite their insurance woes, Pride Toronto organizers told Insurance Business that they are pushing through with their original plans.
“We’re fortunate that we received additional funding from the government that goes to covering some of the security costs in relation to the festival,” said Sherwin Modiste, executive director of Pride Toronto. “At this point in time, we do not foresee having to make any major cuts.”
On June 5, Fierte Canada Pride, a national association of Canadian Pride organizations, announced it had received $1.5 million in emergency funding from the federal government to help festivals cope with the surge in security and insurance costs.
“There is definitely going to be an impact on us paying 300 per cent more in insurance and 150 per cent more in duty officers,” Modiste added. “Ultimately, no one budgeted for this kind of increase.”
Modiste also stressed that there has been “very little change” in the festival’s footprint. Aside from a new 1,000-person beer garden at Nathan Philips Square, the parade route was also extended this year, Pride Toronto confirmed.
At the same time, however, the team closed a 3,000-person beer garden at Yonge and Dundas streets, Modiste said.
As for the parade route, there was “no more than a block or two” in terms of extension, according to the executive director.
“The parade previously ended at Church and Dundas. The parade is now ending at Dundas and Bay,” Modiste said. “We do not believe that any of the increases in cost were justified.”
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