The July 4th holiday is, of course, big for public fireworks shows.  For many Americans, the viewing experience is totally free — find a patch of grass or a parking lot or a rooftop, plop your chair down, look up and enjoy the show.

But the fireworks industry is becoming more and more costly. A big part of that is the skyrocketing expense of insurance premiums to cover pyrotechnics.

Charles McKinley owns a pyrotechnics company that puts on fireworks shows in several Southeastern states. 

“Our clients range from cities and municipalities, to professional sporting teams, all the way down to small town festivals and weddings,” McKinley said.

He says this work has gotten pretty darn expensive. The fireworks industry has been hard-hit by supply chain issues and labor shortages. But the biggest cost McKinley now has to pass on to his customers is insurance, he said.

“There’s a ton of risk associated in this business. And you know, we have to pay for that,” he explained.

He says his annual premiums amount to more than $200,000 — for $10 million worth of coverage. That includes property insurance, transportation insurance, workers comp and, of course, liability. 

And now climate change is making a risky business even riskier. 

“We’re just seeing a lot more weather activity in the 50 states than we have in the past,” said Tami Towne, an insurance underwriter for one of a handful of companies that cover the pyrotechnics industry.

“And that could change the insurance environment to equate to higher premiums,” Towne said.

The fireworks industry is heavily regulated and requires tons of safety permits. During fireworks in drier regions, firefighters are standing by, said Julie Heckman, who heads up the American Pyrotechnics Association.

“And often they will wet down the area where the fireworks are going to be launched,” Heckman said.

Accidents are few and far between, she said. “However, when they do happen, typically it is significant. So there’s a high cost associated with that.”

That high cost and risk are causing some clients to rethink their 4th of July shows, McKinley said.

“We are having a lot of interest in drone shows and in laser light shows as an alternative to traditional fireworks,” he said.

But some alternatives actually cost more. A drone show can be twice as expensive as  fireworks. 

And a traditional fireworks display brings revenue to cities, said Heckman.

“People will camp out all day long, they will book hotel rooms, they will spend money in restaurants,” she said.

And she said a laser or drone show is not going to bring out the crowds in the same way.