After a tumultuous couple of years due to COVID-19, South Australian pubs and clubs are now facing another barrier to keeping their doors open: insurance.

Local venues have been forced to close as the cost of public liability insurance has skyrocketed and insurers have refused to provide cover.

Long-running CBD nightclub Sugar has been closed for eight months due to a combination of COVID-19 restrictions and difficulties obtaining public liability insurance.

Owner Driller Jet Armstrong said he was only able to afford the rising costs of insurance due to crowdfunding.

"I turned from one broker to another here in South Australia when I couldn't get insurance and they ended up saying to me we will never, ever get insurance," he said.

"In desperation, I rang a friend who put me onto a broker in Sydney, who four weeks after I contacted him, managed to get a policy for us, an affordable policy.

"Which of course after being closed for eight months, we've basically exhausted all of our bank account, which was $200,000.

"And we had to start a GoFundMe campaign and it's only the money from the GoFundMe campaign that has managed to keep us afloat long enough to open our doors.

"In fact, the irony is incredible that we're having this conversation because we're opening the doors tonight for the first night."

Mr Armstrong said the first quote he was given by a local broker was $305,000 — 10 times what the club had been paying.

"Which is basically a quarter of our growth turnover, and obviously that's a 'go away' quote," he said.

Live music venue The Grace Emily, also in Adelaide's CBD, closed its doors at 4pm yesterday after failing to find insurance.

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Owner Symon Jarowyj said he hoped the closure would be for two weeks.

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"Basically my broker for insurance got given two weeks' notice from my insurer that they wouldn't be renewing our public liability policy, which is legal, but two weeks to find a public liability policy in apparently a high-risk market … just didn't give my broker enough time to get something over the line," he said.

Mr Jarowyj said the cost of public liability insurance was "getting higher and higher each year".

"The problem is the insurer that I did have didn't even offer an extension until we found a new policy," he said.

Mr Jarowyj said the situation, which followed a long period of COVID-19 restrictions, was "not great".

"The doors are closed again and [there is] no income coming in but hopefully it's for a short time, not a long time," he said.

"And December is predominantly a busier period. We had some good sold-out shows that were coming up in the next couple of weeks so they've had to be moved to other venues."

Mr Armstrong said he had raised the issue with the industry and state politicians.

"We've been the first to experience it but I knew this was going to affect the industry as a whole," he said.