Fireworks & Insurance: A Mix of Tradition, Risk & Innovation

From Diwali to Bonfire Night, Thanksgiving to New Year's Eve, this season is synonymous with pyrotechnic celebrations.

However, the relationship between fireworks and insurance is as volatile as the explosives themselves. While fireworks bring joy and spectacle, they also pose significant risks to health, safety and property. Balancing entertainment with security is a delicate act, one that has shaped a unique insurance landscape surrounding fireworks.

Fireworks factory fires cause soaring insurance costs

Firework-related incidents can range from minor mishaps to tragic accidents. In February 2024, a fire at a fireworks factory in Tamil Nadu, India, claimed 10 lives and injured over 20 workers. The Netherlands, despite banning consumer fireworks, still grapples with casualties during New Year's celebrations, including a young boy's death in 2023 due to a premature rocket explosion.

Environmental hazards are also a concern. In July 2023, illegal fireworks ignited a wildfire in Oregon, scorching over 40,000 acres and threatening hundreds of homes. This incident not only led to widespread evacuations but also raised alarms in the insurance sector.

Transportation of fireworks poses its own risks. A truck explosion in China earlier this year, caused by improper transit of fireworks, resulted in fatalities and extensive damage. In the UK, drivers transporting over 56kg of fireworks risk insurance invalidation, fines, and penalty points.

Consequently, fireworks companies face escalating insurance costs, reflecting the industry's inherent dangers and the need for stringent safety measures.

"There's a tonne of risk associated with this business,” says Charles McKinley, owner of a pyrotechnics company serving several south-eastern US states. “You know, we have to pay for that.” 

His company's annual insurance premiums now exceed US$200,000 for US$10m worth of coverage, encompassing property insurance, transportation insurance, workers' compensation and liability.

"Often they will wet down the area where the fireworks are going to be launched," says Julie Heckman of the American Pyrotechnics Association.

The evolving approach to safe and insurable spectacles

In the UK, the Health and Safety Executive (HSE) offers comprehensive guidelines for organising firework displays, emphasising three key areas:

• Responsible planning, such as early organisation, forming a dedicated team and conducting thorough risk assessments
• Organisers must carefully select and prepare the site, considering factors like spectator safety zones and potential hazards
• Detailed plans for potential accidents or incidents must be in place, including first aid provisions and evacuation procedures.

As insurance costs for firework displays continue to rise, some event organisers are exploring alternative options. These include:

• High-tech drone displays, which offer precision and environmental benefits but can cost up to twice as much as traditional fireworks.
• Laser light displays, a dazzling visual spectacle without the fire risk associated with pyrotechnics.

Notable examples of this shift include the UK's Isle of Wight Festival, which has transitioned from traditional fireworks to drone light shows. While these alternatives often come with a higher price tag, they're gaining popularity due to their reduced environmental impact and potential for lower insurance premiums.

The fireworks industry's insurance tightrope must balance tradition and safety 

The fireworks industry faces a complex future, with insurance playing a crucial role in shaping pyrotechnic displays. Event organisers and companies must carefully balance the allure of traditional fireworks with escalating financial pressures from insurance premiums and stringent safety requirements.

“It’s long been my view that we need to ban the public sale of fireworks, given the potential risk to health if misused, but also the unnecessary fear and alarm they cause in our communities,” says Edinburgh Councillor Cammy Day.

However, others argue for preserving this cultural tradition through innovation and improved risk management.

The challenges mirror those in other high-risk sectors, emphasising the need for creative solutions in both safety and insurance. To ensure the longevity of firework displays, the industry may need to:

• Embrace new technologies for safer pyrotechnics
• Implement more robust safety measures
• Develop innovative insurance models

By adapting to these challenges, the fireworks industry can strive to maintain its place in celebratory traditions while addressing safety and environmental concerns. The future of fireworks may depend on finding this delicate balance between spectacle, safety, and sustainability.

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