Insurance Council of Australia Executive Director Alan Mason is closer than most in the industry to the public liability furore involving surf lifesaving clubs. As a former president of a major Sydney surf lifesaving club, he says the high-profile attack on public liability premiums by Surf Life Saving Australia (SLSA) highlights the lack of consistency in state tort reform and the difficulty in having reform benefits flow on to not-for-profit organisations.

SLSA has been hit with a $1 million public liability bill by an offshore insurer after finding itself unable to acquire cover locally. With less than a month to come up with the money, it mounted an intensive campaign appealing for donations.

Mr Mason said last week that while a lot has been achieved in liability reform, the Commonwealth and some states are yet to pass all their reform legislation and the states have taken different approaches to reform.

“In some cases, the reforms are new to Australia, and there is little previous experience to guide insurers as to the likely impact on claims costs,” he said.

One area which related to lifesavers was how the laws of negligence applied to recreational services. Surf swimming would be regarded as a recreational activity under most of the new laws. While all jurisdictions seek to place greater personal responsibility on those undertaking recreational activities, the actual laws differ from state by state.

“This will make it very hard for SLSA to adopt a consistent national approach to managing its risks in this area,” Mr Mason said. “It will also add great complexity to the assessment and pricing of risk by any insurer. In many cases, it will be necessary to have cases decided in the courts before the effective operation of the new laws will be fully understood.”