What’s driving the rise of litigation?

The claims environment has shifted. Incidents that once ended with an apology now frequently escalate into compensation claims. Even weak claims are often pursued, and insurers set defence costs high from the outset. This can leave venues with inflated claim reserves and a tougher insurance record going forward.

Slips, trips, and falls remain the most common and costly claims in hospitality, with pain‑and‑suffering payouts often exceeding $200,000.

We recently sat down with Lewis Cohen of HWLE Lawyers who gave us key insights into this topic. Firstly, strong evidence and disciplined incident management are essential. High‑resolution CCTV, strict controls around stairwells, accurate staff rosters and clear security contracts all play a major role in defending claims.

Venues should avoid admitting liability or speculating on what they “should have done differently”. They should also maintain up‑to‑date staff and security handbooks, and ensure incident photos are taken with timestamps preserved. Together, these practices significantly strengthen a venue’s position when a claim arises.

How venues influence their own defence

A venue’s operational standards directly affect how effectively a claim can be defended. Strong incident response practices matter, these include:

• Capture independent witness statements.
• Record evidence immediately. For example, confirming floor conditions at the time of the fall.
• Treat injured patrons with care, without admitting liability.
• Complete a detailed incident report while information is fresh.

What insurers want to see

Underwriting expectations are tightening. Common requirements now include:

• No drinks on the dancefloor, with proof that the rule is enforced.
• CCTV is retained for up to 90 days.
• Documented floor and bathroom checks.

Insurers increasingly want evidence rather than assurances, which means venues should record their checks through a physical register behind the bar or a POS‑based button that logs the staff member and timestamp.

Social media is also part of the underwriting process. Images of unsafe or rowdy environments can weaken a submission.

A strong submission shows exactly how a venue identifies and manages its risks. Insurers respond best when policies and procedures are current and genuinely used in day‑to‑day operations, signalling a proactive approach that can help secure more competitive terms.

The current market outlook

Please note, conditions vary by venue type:

• Nightclubs can access specialist products but should expect high premiums and liability deductibles around $50,000.
• Late‑night bars and live music venues face the toughest market and often require offshore insurers.
• Fine dining restaurants are viewed as lower risk with more stable performance.
• Breweries with valuable assets remain attractive to insurers.
• Wineries face reduced appetite due to climate‑driven catastrophe exposures.

The current market is relatively soft, with competitive pricing and broader insurer appetite, however this will not last. As claim frequency and severity rise, underwriting will tighten and rates will follow.

As a venue operator, now is the ideal time to review your insurance program, strengthen risk documentation and work with a broker who understands the nuances of hospitality risk. Chat with our Hospitality insurance expert, Susan Scollon by emailing sscollon@pno.com.au or call 0408 720 569.