Many brokers probably see golf as a hobby rather than a source of insurance work, but the increasing number of golf clubs across the country and the rising risks they face point to opportunities. Industry figures show that there are now more than 1,700 clubs in Australia with membership up more than 10% since 2020. However, the threat from natural catastrophes is also rising leading to higher premiums and greater scrutiny from insurers.
“The predominant threat or peril to a golf course is weather,” said Paul Mullarvey, underwriting manager for sport, leisure and recreation in Australia with Victor Insurance.
Bushfire, storm, storm run-off, flood, hail and wind can all do considerable damage. Mullarvey said the volatility of these nat cat events is also a constant challenge. “That is because you can't build a roof over a golf course and you can't shift a golf course out of the way of a storm,” he said. “But there is always innovation and things you can do.”
For example, said Mullarvey, switching to more flood tolerant grasses.
However, the threats don’t end at bad weather alone. The underwriter said the increased complexity and severity of the risks facing golf clubs has made the issues around their liability “quite topical” among industry stakeholders.
“Golf clubs were once surrounded by paddocks but now they are often surrounded by housing,” said Mullarvey. “Balls can now be hit further and with more players there is more risk from the golf balls themselves – they are little missiles!”
Mullarvey’s firm works through brokers to educate clubs about their duty of care but he suggested that this challenge, together with educating them about insurance options and risk management, can be like getting stuck in the rough. “The unique challenge of underwriting golf clubs is more about the insured’s lack of understanding of the multitude of insurable risks they face,” said Mullarvey.
He said part of the problem is that an atmosphere of peace and beauty doesn’t lend itself to actively preventing insurance risks.
“Golf clubs are nice places with beautiful, manicured landscaping and welcoming clubhouse environments,” said Mullarvey. “They are not perceived to be full of insurable risk exposures like other industry settings might be.”
He said risk mitigation is often only performed when the risk is evident.
There are also affordability challenges for underwriters and brokers to overcome.
“Most clubs are not-for-profit community organisations that are cost conscious, so clubs are mindful of cost,” said Mullarvey. A club’s insurance costs across property, casualty, financial lines, business interruption (BI) and volunteer workers, can steeply rise each year.
Industry sources also say insurers are more closely scrutinizing the risk profiles of golf clubs, especially those in high-risk areas. As a result, clubs may need to provide detailed risk assessments and demonstrate proactive risk management – like improved drainage or firebreaks – to secure or maintain coverage.
All of this, of course, points to a broker opportunity – as golf clubs face a growing range of insurance risks that require careful management and coverage selection.
According to online sources, other key risks facing clubs include:
Theft and vandalism: Golf clubs may be targets for theft - especially expensive equipment like GPS-enabled carts - and vandalism, requiring adequate property and contents insurance.
Personal accident and member risks: Clubs need to cover personal accidents for members, volunteers and workers, as well as member-to-member liability.
Event and prize indemnity: Special events like tournaments and prize indemnity (e.g., for hole-in-one prizes) can expose clubs to additional risks.
Are you an insurance professional involved with golf clubs? What risks are on the rise? Please tell us below.
