According to the ICA, public liability insurance premiums have surged by up to 60% since 2019. This sharp increase is attributed to complex and prolonged claims processes under the current legal framework, coupled with escalating legal costs in an increasingly litigious environment. The ICA emphasizes that without comprehensive reform, these trends will continue to place financial strain on businesses, particularly small and medium-sized enterprises (SMEs) and not-for-profit organizations.
The white paper identifies three primary areas requiring immediate attention:
- Psychological Injury Claims: These claims are often more intricate than physical injury claims, leading to extended resolution times and higher costs. The ICA suggests that reforms should aim to streamline the process and provide clearer guidelines for such claims.
- Legislation on Dangerous Recreational Activities and Obvious Risks: Existing laws governing these areas have not been thoroughly reviewed since 2001. The ICA advocates for updates to ensure the legislation reflects current societal norms and risk assessments.
- Worker-to-Worker Public Liability Claims: The increasing number and complexity of these claims are driving up insurance costs. The ICA recommends reforms to simplify the legal processes involved and to manage the rising number of claims effectively.
Andrew Hall, CEO of the ICA, stated, "Insurers have been working with businesses facing affordability pressures and challenges accessing insurance, but it is clear improvements to civil liability settings are needed to ensure they remain fit for purpose."
For Australian businesses, particularly those in high-risk sectors such as live entertainment, tourism, and community events, the rising cost of public liability insurance poses a significant challenge. The ICA's call for reform aims to create a more sustainable insurance market by addressing the root causes of premium increases and ensuring that businesses can continue to operate without undue financial burden.
In conclusion, the ICA's white paper serves as a critical call to action for state and territory governments to modernize civil liability laws. By doing so, they can help alleviate the financial pressures on businesses and contribute to a more stable and affordable insurance landscape in Australia.
