Govt pushes for states to tackle PI insurance
The Federal Government will be pushing to include professional indemnity cover in any legislation the states make on public liability insurance.
The Assistant Treasurer Senator Helen Coonan speaking at theCPAConference in Melbourne this morning says that she wants the subject included in a ministers’ meeting to be held in Brisbane on November 15.
“We will be talking about national liability laws in all states. Organisations need to make sure they press their state representatives to include professional indemnity in the discussions. The government is pushing for savings in professional indemnity cover premiums through reform,” Coonan says.
The NSW State Government has introduced public liability legislation that does include PI. It is proposing professionals, such as accountants and financial planners, be monitored by a panel of experts and claims be limited through proportionate liability.
The WA State Government is also planning changes to public liability laws, but is not including professional indemnity cover. The other Australian states have no proposed public liability legislation changes.
Coonan says professional indemnity cover has become “the poor cousin” of public liability insurance discussions.
“There is an appropriate role for government in discussion on professional indemnity rules. However, we don’t want to make the system so difficult that we frighten insurers away,” she says.
Coonan says one of the problems with all public liability insurance is the legal system believes insurers have deep pockets to meet high claims.
“But the courts don’t realise the high settlements are subsequently paid for by ourselves through higher premiums. The government has to achieve the right balance between the plaintiff and the defendants in liability cases.”
The chairman of the CPA Board Insurance Committee Geof Church says one problem with professional indemnity cover in Australia is that it is a small player in global terms. Australian professional indemnity is less than 2 per cent of the global market.
“If the major underwriters don’t want to play in the Australian market, there is not much we can do about it,” he says.
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