At one time, predictions suggested that we will see walls starting to close, and the remainder spiralling in cost to use. What are the issues that might bring this about? Read on...

What is the supposed crisis and what has caused it?
Insurance is the answer and the causes are numerous. The costs of public liability insurance at climbing walls has been increasing over the past couple of years in a manner that will cause walls to either close or bump up their entrance charges to cover the increased premiums. And before anyone accuses the walls of making vast profits for their shareholders, be assured that climbing walls are not the way to untold riches that many think.

Why is insurance increasing?
According to Perkins Slade (specialist sports Insurance Brokers and the only long term player in the wall insurance game), insurance premiums are dictated by two things - the claims history, and the perceived risk of the activity. But there are other external factors that come into play and it is arguably these factors that have had the most significant impact on premiums.

The first external factor is September 11th. The cost to the insurance industry from the devastation has led to increases in premiums of 25-100% and in some cases the refusal of insurance for perceived risky activities – ski slopes and skate parks are finding it increasingly difficult to get insurance at any price.

The second factor is the state of the stock market. Insurance companies are bound by law to have a certain amount of liquidity to cover their liabilities i.e. they need to have mounds of cash in the bank to pay out if everyone claims. During periods of high stock market gains the insurance companies have invested in the market and this has actually helped to keep premiums at a slightly lower rate. Insurance companies have often made the majority of their profits from investing rather than from premiums. But this is all changing, the stock market is performing badly, so insurance companies are having to revert to premiums to make their profits and are selling shares to maintain their legally required liquidity. This has the unfortunate side effect of driving the stock market even lower, which further exposes their position.

Claims history
Obviously a wall with a history of claims is going to pay more, after all that’s how all insurance works, if you crash your car every week you’ll pay more for insurance. But many walls have an excellent claims history and Perkins Slade quote a figure of 28 claims over seven years for the 20 odd walls that they insure, i.e. only 0.2 claims per wall per year. So that’s surely not the problem. Or is it? The problem with climbing wall claims is that they are potentially expensive – in one case going through at the moment there is talk of a £70K pay out, and that’s without costs being added. So every accident is treated as very expensive and the insurers then put a reserve against accidents in case a claim is made. These reserves need to be kept until the time limit for bringing a case has expired – three years for over 18’s and up to the age of 21 for under 18’s.

A question of risk
All climbing carries an inherent risk, and indoor climbing is no exception. But research shows that the number of accidents leading to significant injury is low in climbing, despite it being perceived as a “high risk sport”. This could be because as climbers we are aware of the risks and take steps to minimise them, effectively performing risk assessments every time we climb, make a move or place some gear. But still the perception of “high risk” remains – perhaps it’s our own fault, maybe we like to think of ourselves as risk takers whereas in reality we’re doing an activity that has less chance of injury than five a side football!

So what can be done?
Thankfully, quite a bit, climbing walls and the BMC are developing a plan of campaign:

• Improve the wording of disclaimers that walls use, make them more detailed and turn them into waivers. Under British Law it is not possible to waive your rights but a properly worded and signed waiver will be useful as evidence of knowledge of the risks of an activity.
• Continue detailed accident and claims statistics research. Identifying the number and type of accidents improves risk management
  leading, theoretically, to a reduction in accidents.
• Develop an accreditation scheme for climbing walls, standardise procedures so that when a claim is brought against a wall it is easy to show that the wall is following recognised practises.
• Improve the information available to solicitors, insurers and expert witnesses - the BMC have received calls from law firms asking why climbers on bouldering walls were not roped up, and a call from a wall whose insurance company were insisting on knee and elbow pads!

Anything else?
Well, there are a few encouraging signs outside the wall industry:

• The problem of insurance company liquidity and its effect on the stock market have been recognised by the Financial Services Authority and moves are afoot to make changes.
• Court of Appeal judgements over the last 12 months will hopefully discourage claims management companies from instigating so many cases – these companies are the dreaded ‘no win, no fee’ people that advertise heavily.
• More companies and brokers are getting involved with the wall insurance game – increased competition normally leads to lower prices.

And finally
Will this crisis destroy the wall industry? Hopefully not but there is a lot of work ahead for the BMC, the walls themselves and you as wall users to ensure that climbing walls don’t become a thing of the past. Play your part, remember that indoor climbing is still a risky activity and accept your responsibility – watch your leader when you are belaying, and spot your mates when bouldering. A significant proportion of accidents at walls are caused by the complacency of experienced climbers.

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