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<br><P><B><I>Professions say indemnity crisis needs leadership from Prime Minister and Premiers</P></B></I></B></I>
<P>Professions Australia today called on the Prime Minister, Premiers and Chief Ministers to provide personal leadership to overcome the worsening crisis in professional indemnity insurance.</P>
<P>Professions Australia’s national president, John Castles, said the leaders had worked co-operatively to overcome the crisis in public liability and medical indemnity.</P>
<P>"The situation in professional indemnity is just as serious and needs the same degree of leadership, co-operation and sense of urgency if serious disruption to the Australian way of life is to be avoided," Mr Castles said.</P>
<P>He was speaking after Professions Australia’s General Meeting in Canberra. Professions Australia represents 200 000 professionals ranging from accountants to engineers, architects and dentists. </P>
<P>Mr Castles said professional indemnity was now becoming increasingly difficult to obtain because the number of insurers had plummeted from 37 to five. When it <I>was</I> available, premiums had increased by up to 1000 per cent, the cover available had been limited and excesses had increased.</P>
<P>The situation was already impacting on businesses: </P>
<UL>
<LI>an engineering company had been forced to stop advising on cooling tower maintenance (legionnaires’ disease) because it could not get insurance;</LI>
<LI>accountants were withdrawing from audit services as shown by the recent surveys by the accounting bodies;</LI>
<LI>some architects were having difficulty getting coverage for tall building work, other firms were no longer able to offer advice on pollution control, building inspections and asbestos removal;</LI>
<LI>environmental consultants were struggling to get insurance cover for work involving removal of hazardous waste; </LI>
<LI>some engineering firms will have to bear premium increases of 400 per cent over 2002;</LI>
<LI>premiums for many professions had risen by up to 200 per cent up to the first half of this year and these practitioners are dreading the next round of increases. </LI></UL>
<P>Mr Castles said the insurance industry had warned the situation would continue to worsen unless there was national reform of the indemnity laws.</P>
<P> </P>
<P>"What is required is for all States to follow the lead of New South Wales and provide for proportionate liability in professional indemnity and a regime of professional standards with a safety ceiling, or cap, on claims (excluding personal injury). Professional standards legislation also provides for comprehensive risk management to protect the public."</P>
<P>Mr Castles said he had written to the Prime Minister and Premiers stressing consumer protection and risk management. (Copy available)</P>
<P>He said a meeting earlier this month of Federal and State ministers with responsibility for insurance had started the process for achieving the necessary reforms, but their action lacked the sense of urgency that was required and which had been demonstrated in reforming laws on public liability and medical indemnity. </P>
<P>"The ministers are not to meet again until April and that’s far too late. The crisis is already here.</P>
<P>"Professions Australia believes the PM, Premiers and Chief Ministers at the COAG meeting on December 6 should agree to the earliest legislation for proportionate liability and necessary amendments to the Trade Practices Act.</P>
<P>"COAG should also instruct relevant ministers to speedily decide on a national scheme for professional standards, similar to that already in place in NSW."</P>
<P>Mr Castles said the actuarial company Trowbridge Deloitte had advised the professions such reforms would reduce premiums. (Report available)</P>
<P>But, without reform, professional indemnity would become increasingly difficult to obtain and more expensive, with some groups unable to get cover. </P>
<P>25 November 2002</P>
<P>CONTACT: </P>
<P>John Castles, President, 0408 370 053</P>
<P>David Stephens, Policy Consultant, 0413 867 972</P><B></B></B>
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