Extreme weather and increasing liability risk are causing premiums to rise to unaffordable levels for camp venue operators, and the Insurance Council of Australia (ICA) is working with stakeholders on ways to ease the crunch. 

ICA says since 2019 the caravan and camping sector has been impacted by a hardening market, causing some insurance providers to withdraw from the sector. 

“Caravan parks and camps located in areas of high extreme weather risk and/or which have installed guest facilities that may impact underwriting risk are particularly affected by this as these facilities present more risk and have been a source of public liability claims,” a spokesperson for ICA said. 

Examples of guest facilities include pools, water slides, jumping pillows, trampolines or licensed bars. 

“A hardening market means insurers and reinsurers must consider and in some cases adjust their exposure to certain risks,” the ICA spokesperson said. 

“Through the ICA’s Business Advisory Council, the ICA has been engaging with key insurers, brokers and underwriting agencies across the sector to explore ways to address insurance affordability and availability.    

“The ICA has also been engaging with the Australian Caravan Industry Association to develop guidance and assistance to park operators on practical measures they can implement to be better placed to obtain insurance going forward.” 

Underwriting agency Coversure, which has provided insurance for camp-related activities, says rates have stabilised after going up 300-400% about three to four years ago. On average insureds may now be paying about $5000-7500 in annual base premiums. 

“That’s the market and that’s where it has been for the last few years,” GM Adrian Gamble told insuranceNEWS.com.au. 

“If people have not initiated updated risk assessment and management in the last 3-4 years and updated the way they run their business, then the insurance market for liability for these sorts of activities is extremely hard.” 

He says there are a number of insurers that are still providing cover for insureds who meet their underwriting criteria and have undertaken appropriate mitigation measures such as implementing a work safety and health compliance plan. 

“As long as they have got good compliance, I don’t see any issues,” Mr Gamble said.  

“The thing I point quite often too is that particularly for not-for-profits or camps is, have you engaged a work health and safety consultant? 

“And do you understand what your responsibilities are because there are a lot of parallels between your work health and safety exposure and your liability exposure and for most of them the answer is ‘no’. 

“So they have done nothing about assessing, documenting, mitigating their risk. They are just expecting to transfer the whole risk and that’s going to be problematic at the moment.” 

Australian Camps Association (ACA) CEO Peter McDougall says the premium challenge has been going on for several years and worsened significantly after the covid pandemic. 

“Post-covid has seen premiums or lack of cover reach crippling heights,” Mr McDougall told insuranceNEWS.com.au. 

“Insurance premiums have escalated to a very concerning level which is placing extreme financial pressure on camp owners. Subject to the location of the camp, some venues cannot get insurance cover for natural disasters and those that can, the premium is at an all-time high. 

“Without being able to pinpoint an exact reason, this is a worldwide issue but Australia seems to be impacted greater than some other countries. This most likely is due to our history of bushfires and floods.” 

The ACA is advocating on behalf its members to government and insurers, and this month Mr McDougall was in Spain for the International Camping Congress where he raised the matter for discussion. 

“This is a worldwide issue that all countries can help by banding together to try and influence the insurance underwriters to support our industry better than they are at the moment.” 

A broker in regional Victoria says he is not surprised that camp venue operators are finding it tough at the moment. 

“In my opinion, particularly in relation to school camps, the amount of claims for personal injuries and suing insurers…unfortunately there are too many spurious and frivolous claims. That inflates cost. It’s that simple,” the broker, who preferred not to be named, told insuranceNEWS.com.au.