Public Liability Insurance - What Now in 2003

For almost eighteen months many thousands of Not for Profits around the country have been grappling with huge premium increases in Public Liability insurance and in many cases refusals to renew their policies. But how much has changed since governments, state and federal, began to sort through the issues?

According to insurance underwriters the legislative changes will take a long time to have any real impact, as there will be very little reduction in premiums until the changes are tested in a court of law.

While that doesn’t sound very encouraging for the community sector, work behind the scenes continues to try to find alternatives such as a bulk buying scheme in NSW – an insurance project by the Council for Social Service of NSW (NCOSS).

A bulk buying scheme operates by purchasing insurance using the combined buying power of a number of organisations to drive down the premium price and negotiate improved policy coverage.

The Project Officer responsible for establishing the Scheme, Sandra Handley has spent the last few months developing eligibility criteria and researching existing schemes while providing insurance information to community sector organisations experiencing difficulties with PL insurance.

Handley says she has spoken to between 600 and 700 organisations and so far three hundred of those have formally registered their interest in being part of the bulk-buying scheme.

NCOSS has also begun the tender process, looking for parties interested in developing the scheme.

Handley says she hopes to be able to have a scheme up and running by March/April this year.

She says NCOSS has also sought pro bono legal work through PILCH to investigate the implications of reform legislation being introduced in NSW which may directly affect bulk buying schemes.

In NSW she says there is the potential to have the buying power of a $100 million premium pool that should provide substantial discounts to the sector.

In December three leading insurers, Allianz Australia Insurance Limited, NRMA Insurance and QBE Insurance (Aust) Ltd set up a co-insurance panel to offer community groups access to public liability insurance.

Co-insurance is the practice of sharing substantial risk among a group of insurers, with each taking an agreed proportion of the risk. In turn the cost of claims is spread in the same proportion.

A similar scheme has been introduced in recent weeks in West Australia called Community Care Underwriting Agency (CCUA) in collaboration with the same group of insurers.

Queensland has begun its own bulk-buying scheme while other states are investigating similar schemes.

However the Insurance Council of Australia has warned of the need for consistent law reform across the states and the Commonwealth.

ICA Executive Director, Alan Mason says it is critical for all governments to achieve a nationally consistent package of reforms to enable the re-establishment of a competitive market.

In December a meeting of state and federal ministers agreed on a package or reforms to the laws of negligence that the ICA says should set the scene for greater affordability and availability of Public Liability insurance.

Alan Mason says a consistent approach is essential to return stability to the market.

Let’s hope he’s right! What steps have you taken to obtain public liability insurance for your organisation? Why not take part in our latest on-line Instant Poll at probonoaustralia.com.au.