Consulting and technology firm Xceedance has suggested Australia should consider introducing a statutory scheme for public liability insurance given difficulties faced by many organisations in gaining affordable and suitable cover.

Business Leader – Key Accounts Australia Prateek Vijayvergia says a scheme similar to those that operate for compulsory third party (CTP) and workers’ compensation cover should be debated.

“Given more than two decades have passed since there was major tort reform in Australia, it is opportune to re-examine current legislation and whether it is fit for purpose,” Mr Vijayvergia says.

“CTP and workers’ compensation schemes have provided genuine reform that has helped people rehabilitate and reduced adversarial litigation. That compares with the possibility of waiting for the judicial system to establish damages years after the event.”

Mr Vijayvergia says complexities around public liability are a barrier to equitable outcomes, because “only the sophisticated can navigate it and must fund themselves through the court processes”, while market changes affect cover availability.

“Insurers enter and exit the public liability class, depending on factors such as competition and a softening market. When they withdraw, market gaps are exposed, leaving organisations and the public potentially at risk,” he says.

Mr Vijayvergia says achieving consensus on a nationwide scheme is unlikely, but if one state takes the lead others may follow when they see the benefits.

“For insurers, any structural reform to public liability insurance would be a major change to operating systems and IT, but they have demonstrated an ability to respond to many structural reforms in the past,” he says.