Capping professional liability payouts for professional groups which meet a set of stringent quality standards is a cornerstone of the NSW Government’s model legislation being considered by other state governments. Now some associations are considering what they can do to set standards that would bring them under such legislation.

While only a limited number of professions are affected by the capping proposal at present, the opportunity to lower professional indemnity (PI) exposures and therefore PI premiums hasn’t been lost on other associations whose members at present aren’t regarded as professionals in the same way as lawyers, accountants and engineers.

Under the proposals, professionals would have to be heavily regulated, often by their own association. They would have to demonstrate high professional and ethical standards, strong risk management, and an ability to exclude members who fail to meet the standards.

National Insurance Brokers Association CEO Noel Pettersen told Sunrise Exchange News yesterday that his association is one of those investigating the option. “Professionalism is what it’s all about, but at present this is just an option we’re working through,” he said. “But it is a very interesting possibility.”

Financial Planning Association CEO Ken Breakspear said if planners could be viewed as more professional “and in turn PI is reduced, then that’s great”.