Insurance hikes king hit
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Tuesday, 6 November, 2001 - 21:00
SPORTING and community organisations are likely to be the next victims of soaring insurance premiums, with the massive expense expected to force many to consider winding up their operations.
In the wake of the September 11 terrorist attacks in the US and the collapse of HIH, insurance premiums have skyrocketed, in particular those of public liability insurance, which is taken out by most sporting and community groups.
WA Sports Federation executive director Bob Welch said the issue of the increasing cost of public liability insurance had been around for some years but the situation had worsened in recent times.
“For example the WA Swimming Association presently pays a $9000 (public liability) insurance premium and this year, looking for reinsurance, the first quote they received was $48,000,” Mr Welch said.
“They eventually paid $18,000 but that is still a 100 per cent increase on last year.”
The situation had been exacerbated for some groups by the Education Department’s decision not to deal with organisations that were not insured for up to $20 million. In the past, the public liability insurance requirement was $10 million.
The growing expense may force smaller sporting and community organisations to close or, worse, choose to operate without insurance and unknowingly put committee members’ livelihoods at stake.
“Some of these organisations may feel insurance is unaffordable and decide against insuring themselves,” Curtin Business School business law lecturer Colin Huntly said.
“But if an organisation has no assets and no insurance and someone wants to sue, they will look to committee members.
“Public liability insurance will not stop people suing but it will provide a source for compensation … which may stop people going after committee members.”
Mr Welch suspected many organisations would close down because of the high insurance costs and let their activities become purely recreational.
“This means people would just be invited to turn up and play, with no umpires, no coaches, because no one will be prepared to take on the liability,” he said.
Mr Welch pointed at a growing tendency for people to sue and courts awarding large compensation amounts as two factors that had pushed up public liability insurance premiums.
Insurance Council of Australia WA group manager Daryl Cameron agreed and suggested sporting and community organisations with common interests band should consider obtaining insurance as a group.
“There is an opportunity for sporting groups and local community groups to get together and present such a scenario to insurers,” Mr Cameron said.
“I think we will see a lot of that in the first quarter of the calender year as organisations seek re-insurance.”
In the wake of the September 11 terrorist attacks in the US and the collapse of HIH, insurance premiums have skyrocketed, in particular those of public liability insurance, which is taken out by most sporting and community groups.
WA Sports Federation executive director Bob Welch said the issue of the increasing cost of public liability insurance had been around for some years but the situation had worsened in recent times.
“For example the WA Swimming Association presently pays a $9000 (public liability) insurance premium and this year, looking for reinsurance, the first quote they received was $48,000,” Mr Welch said.
“They eventually paid $18,000 but that is still a 100 per cent increase on last year.”
The situation had been exacerbated for some groups by the Education Department’s decision not to deal with organisations that were not insured for up to $20 million. In the past, the public liability insurance requirement was $10 million.
The growing expense may force smaller sporting and community organisations to close or, worse, choose to operate without insurance and unknowingly put committee members’ livelihoods at stake.
“Some of these organisations may feel insurance is unaffordable and decide against insuring themselves,” Curtin Business School business law lecturer Colin Huntly said.
“But if an organisation has no assets and no insurance and someone wants to sue, they will look to committee members.
“Public liability insurance will not stop people suing but it will provide a source for compensation … which may stop people going after committee members.”
Mr Welch suspected many organisations would close down because of the high insurance costs and let their activities become purely recreational.
“This means people would just be invited to turn up and play, with no umpires, no coaches, because no one will be prepared to take on the liability,” he said.
Mr Welch pointed at a growing tendency for people to sue and courts awarding large compensation amounts as two factors that had pushed up public liability insurance premiums.
Insurance Council of Australia WA group manager Daryl Cameron agreed and suggested sporting and community organisations with common interests band should consider obtaining insurance as a group.
“There is an opportunity for sporting groups and local community groups to get together and present such a scenario to insurers,” Mr Cameron said.
“I think we will see a lot of that in the first quarter of the calender year as organisations seek re-insurance.”