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<a href = "VICletter.html">Victorian market failure in Professional Indemnity insurance</a><br>
<a href = "CVSTP.html">Coonan's view a shock to professionals</a><br>
<a href = "PBULC.html">Peak body urges liability cap</a><br>
<a href = "LDRA.html">Liability decision rouses anger</a><br>
<a href = "PLNHG.html">Proportionate liability is not Holy Grail</a><br>
<a href = "GPAS.html">Government position appears to be shifting</a><br>
<a href = "pumta.html">Professions urge ministers to act now</a><br>
<a href = "tpauc.html">TPA 'undermines capping'</a><br>
<a href = "mtstmt.html">Market 'too small and too much trouble'</a><br>
<a href = "pimfnps.html">PI market failure needs a package solution</a><br>
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<a href = "profcomppublic.html">Professionalism, competition policy and the public interest: Issues paper (2003)</a><br>
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<a href = "Feb2004PISurveys.html">February 2004 professional indemnity surveys</a><br>
<a href = "HigherEdltrs25Sep03.html">Higher Education letters 25 Sep 2003</a><br>
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<br><B><U><FONT size=3>
<P align=center>Guide for Professionals - Key Messages to be communicated on Liability Reform</P>
<P></B></U> </P>
<P>[Tip: the points below are a summary of the position that has been adopted by your professional body on what needs to be done, and why, to address the problems in the market for professional indemnity insurance. Whilst we are looking to deliver a consistent message to parliamentarians Australia-wide on this issue, remember to personalise your message. In talking to your local Member of Parliament, talk about your experiences as a resident and as a member of the local business community. <U>But remember to emphasise the benefits to the consumer!</U>]</P><B><I>
<P>What this is about:</B></I></P>
<P>As with public liability and medical indemnity insurance, professionals and tradespeople are also facing a serious and accelerating market failure in insurance. Market failure means the inability of professionals to obtain adequate, affordable (and, in some cases, any) professional indemnity (PI) insurance for the full range of services they provide.</P>
<P>Many are affected: engineers, architects, lawyers, accountants, actuaries, audiologists, environmental services, vets, electricians, plumbers etc.</P>
<P>The flip-side of market failure in PI insurance is that consumers will not be able to get the services they need or will be unable to get services backed by insurance.</P><B><I>
<P>What has caused market failure?</P>
<P></B></I>Problems with insurance generally (September 11, HIH collapse etc), combined with lack of profitability of PI insurance in particular, has seen the number of insurers collapse to a mere handful in the past 2 years.</P>
<P>Meanwhile, professionals face ever-increasing risk due to the litigiousness of our community (looking for someone to blame in the event things go wrong). </P>
<P>Australia a small market, but is seen as high risk and hence is unattractive to overseas insurers/reinsurers. (Historically Australia generates 2% of global premiums, 4% of global payouts.)</P><B><I>
<P>Implications for consumers:</P>
<UL></B></I>
<LI>In the event of something going wrong there will be no-one to sue</LI>
<LI>Consumers won’t be able to access professional services as these are being withdrawn/restricted – includes many vital services (e.g. pre-purchase home inspections, asbestos removal, audits of superannuation funds etc)</LI>
<LI>Consumers will lose the security of being able to deal with properly insured professionals and tradespeople as more service providers "go bare" (have no insurance).</LI></UL><B><I>
<P>Implications for professionals:</P>
<UL></B></I>
<LI>Professionals can’t get adequate, affordable (or, in some cases, any) insurance so are withdrawing from higher risk services</LI>
<LI>Some are leaving the professions altogether</LI>
<LI>Professional associations forced to look at members’ insurance requirements – some with mandatory insurance requirements forced to reduce requirements; some considering abandoning compulsory insurance altogether due to market problems</LI></UL><B><I>
<P>What is being done</B></I>?</P>
<P>Insurance Ministers (Federal, State and Territory) recognise there is a serious problem. Ministers are working on three essential reforms: Professional Standards Legislation (PSL), Proportionate Liability (PL) – both need to be introduced by all State and Territory Governments – plus changes to the Federal Trade Practices Act to give full effect to State/Territory PSL & PL.</P>
<P></FONT><B> </P>
<P align=center>PSL + PL (+ TPA changes) = Professions will be insurable & CONSUMERS protected</P>
<P></B><SPAN> </P></SPAN>
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