Does the tragedy on the M5 mean the end for Firework and Bonfire displays?

Oval Insurance Broking takes a look at the possible side effects of the unproven allegation that the local Taunton firework display played a role in Friday night’s accident.

Bonfires and firework parties are hazardous activities individually and more so in combination especially when families are attending in numbers. With as yet unproven allegations that drifting smoke from fireworks adjacent to the M5 near Taunton being cited as a possible cause of the motorway carnage that happened on Friday night, event organisers will be concerned about the response of their insurance protection. Undoubtedly, if the allegations are proven insurers involved in the crash will look to recover outlays from someone else.
 
Event policies

Most commercial organisations will be buying a Public Liability insurance, covering damages and legal costs in relation to legal liability claims from third parties, who are injured or have their property damaged as a result of the negligent act. Policies usually have cover included for defence costs against certain criminal allegations particularly if there is a breach of health and safety legislation.

In the case of the M5 motorway accident, for any of the firework display organisers to be found liable to pay compensation for damage to the vehicles, the road and street furniture and for personal injury, negligence would have to be proved. If the smoke escaping from the site of the display is found to be a contributory factor, it is possible that existing legal precedent has created a strict liability and the organisers are likely to be liable - a well-written risk assessment investigating the foreseeable consequences of things getting out of control might be a mitigating factor. 

Public Liability policies for commercial organisations are intended to cover the activities of that organisation which have been declared to insurers. Whilst it might be that an annual policy includes a firework party usually they are notified to insurers as and when they happen and additional premium paid particularly if there is a charge for entry. Where the party is an annual event for a fund raising committee or is a pure one-off commercial venture it is usual for a separate insurance policy to be purchased which is available via schemes specifically designed for that purpose.

Household policies are not so restricted. Claims in negligence involving family fireworks would normally be covered by household insurance. If an entrance fee or contribution has been charged insurers might take a harsher line unless the fee is for charitable causes.

Whilst the maximum amount payable on Public Liability insurances can go into hundreds of millions of pounds, the most common limit is around £5m which could easily be exhausted in this tragedy.