Rising premiums are creating havoc for a range of events and businesses – and HIH is copping the blame. In fact, international liability rates are also rocketing, but HIH – and lawyers – are being identified as the main causes. Some examples:

The Victorian town of Thorpdale has experienced a premium rise in the public liability premium for its annual Potato Festival. It’s up from $495 to $4850 and the organisers are, well, boiling.  

The increase isn’t all that unusual. Increases of around 300% for public liability are now being reported more regularly, and agricultural shows, sporting carnivals and festivals that are generally run by small volunteer groups are crumbling under the pressure.

The HIH collapse is also being blamed for a decision by a Victorian Government agency to demand $10 million public liability cover for tourism operators using crown land. Facing a hostile reaction from small businesses reportedly facing premium rises of up to $28,000, Parks Victoria manager Russell Mason said HIH and the increased readiness of Australians to sue for mishaps are the major causes of the new rule.

ICA Executive Director Alan Mason said the biggest impact on public liability has been the sharp increase in claims. He said APRA’s latest statistics show total liability claims have risen from around $1.3 billion in 1998 to $2.1 billion last year. That’s a rise of almost 60%. “In other words, courts are becoming more generous.”

Mr Mason said people who held cover with HIH are experiencing massive increases because of the extremely low premiums offered by the failed company. The latest general insurance industry survey predicted the liability classes will continue to lose money in the coming year.