In a whitepaper released earlier this month, the Insurance Council of Australia (ICA) has called for urgent reforms to outdated state and territory laws that are driving up insurance costs for businesses across the country. The whitepaper is titled 'A Sustainable Public Liability Insurance Market in Australia: The Case for Civil Liability Reform'.
These state-based civil liability laws have not been reviewed in almost 25 years and are adding unnecessary pressure to some of the country’s industries.
For instance, public liability insurance is a crucial safety net for businesses, not-for-profits and community organisations, enabling them to securely open businesses and service the public.
This is particularly the case for live music venues, festival operators, caravan parks and amusement venues who accommodate or offer services to large numbers of people and rely on this insurance to operate securely.
Said ICA CEO Andrew Hall, “The industries and businesses most impacted are often a driver of tourism and economic activity and contribute significantly to their community’s economy and culture.”
However, claims have become more complex, costly and drawn out by settings under state laws that have added immense pressure to the affordability of civil liability insurance, with the average cost of public liability insurance increasing by increasing by up to 60% since 2019.
This is compounded by Australia’s increasingly litigious environment that is increasing the cost of claims, including rapidly growing legal fees.
According to the whitepaper, areas for reform that are having the greatest impact on cost include:
- Psychological injuries: These claims are often more complex than other injury claims leading to long claims times, compounded by a lack of health professionals.
- Legislation governing dangerous recreational activities and obvious risks: Legislation in relation to dangerous recreational activities and obvious risks hasn't been comprehensively reviewed since 2001, with existing laws no longer relevant.
- Increasing cost of worker-to-worker public liability claims: Reform is required to address the legal complexities, long claim periods, and inflated number of worker-to-worker claims, which underpin some of the most significant cost pressures on public liability insurance.
The whitepaper can be accessed here.