Alert No 107 Attach 0ne
4 Key messages
1. There is market failure
- Professionals can’t get insurance for many types of work
and, when they can get it, they find premiums and excesses have skyrocketed.
- Consumers won’t be able to get the professional services they need:
professionals won’t be providing them because they can’t get insurance cover –
or they will have closed down altogether.
- Consumers also run the risk that a professional is not insured
but they won’t necessarily know this.
2. It’s happening here and now
It’s happening right here in the electorate of [….]
and it’s affecting many professions.
- It’s happening particularly to small business people
because the majority of professionals are in small business.
3. There is a solution: PSL + PL + TPA
PSL – Professional Standards Legislation (for economic loss, not personal injury)
Protects consumers – by requiring professionals to have professional indemnity insurance
and by requiring high professional standards and risk management.
- Protects professionals – by capping civil liability payouts
but at a high level so that all claims from individual consumers are covered and 98 per cent of corporate claims.
- Gives some certainty to insurers – because they can calculate likely payouts.
PL – Proportionate Liability
Makes providers responsible only for the loss they themselves cause.
TPA – Trade Practices Act amendment
Treat liability under the TPA in the same way as actions under State or Territory law.
4. Do it nationally – and as a package
Nationally consistent basis – ‘one in, all in’
to avoid ‘forum shopping’
to avoid professionals leaving jurisdictions that don’t have PSL and PL.
(We can provide a pamphlet on the issues and a short paper on how national administration would work.)
- Finally, all three parts are essential: PSL + PL + TPA.