Premier announces action plan on public liability insurance premium increases

5/2/02
The State Government will introduce legislation into Parliament to provide members of volunteer organisations with qualified immunity from personal liability for negligence.
Premier Geoff Gallop said the legislation was part of a five-point plan of Government action to address massive increases in public liability insurance premiums.
The premium increases, some as high as 1,000 per cent, have hit volunteers, small business, and sport and recreation groups.
Dr Gallop said a Volunteers Protection Bill would be urgently submitted to Parliament to protect the majority of not-for-profit community organisations in Western Australia whose members provided essential services and were personally liable for negligence.
He said the legislation would transfer liability from the individual volunteers to the community organisations.
"Currently in WA, voluntary members of not-for-profit organisations that provide community services are not covered for public liability and they therefore could be held personally liable," the Premier said.
"The Bill, by providing volunteers with qualified immunity, seeks to provide them with a level of comfort although it will not necessarily solve the problem of the increase in premiums."
Other measures adopted by Cabinet included:

• requiring public sector agencies to review the insurance coverage required in Government contracts. In some cases, contractors might simply be over-insured and premiums could be reduced by up to 24 per cent;

• education programs being undertaken by RiskCover (the Government's insurance arm) in conjunction with major Government departments, to promote risk minimisation strategies to small business, volunteers groups, and sport and recreation groups and to provide relief in the medium to longer term from high insurance premiums;

• establishing a working party comprising Crown Solicitor's Office, RiskCover, Treasury, Small Business Development Corporation, Sport and Recreation, Community Development and the Department of Premier and Cabinet to investigate legal remedies, including capping claims and finding quick settlements; and

• requesting that the Prime Minister extend the current ACCC inquiry to insurance premiums to specifically address public liability insurance issues.

"Sharply increasing premiums are threatening the viability of many small businesses, volunteer groups, sporting clubs and associations," Dr Gallop said.
"It is no exaggeration to say they are a major threat to our way of life."
The Premier was concerned that an increasing number of organisations might not insure for public liability and that could, in turn, lead to financial difficulty for people who made claims against them.
Premiums had soared since the collapse of HIH Insurance, which had held a large share of the public liability market; the events of September 11 which led to insurers internationally taking a more cautious approach to risk; the increasingly litigious attitude of society which had seen the number of insurance claims nationally jump from 55,000 in 1998 to 88,000 in 2000; increasing high-risk recreational activities in recent years; and a range of other factors.
Dr Gallop said one of the most effective ways of reducing public liability insurance premiums was for organisations to review their risk management strategies.
"For example, horse riding clubs could significantly reduce their premiums if they insisted that riders wear appropriate footwear, rather than the practice at present of allowing riders to wear sneakers," he said.
"At the same time, Government agencies should be re-examining the level of public liability cover that they require of consultants. This will have two benefits of lower premiums for consultants and thus lower charges to Government."
The Premier said the Government's response to skyrocketing public liability premiums was only the start of a process that would ultimately require a national solution.
He said the State Government welcomed calls by Federal Assistant Treasurer Helen Coonan for a national meeting but warned that the Commonwealth must have genuine solutions to consider.
"At the moment we have two Federal Ministers apparently pulling in different directions so it's important they get their act together because we don't want a talk fest, we want real solutions," Dr Gallop said.
Premier's office: 9222 9475