Brokers say everyone is facing premium rises due to the soft market that existed before last year.  David Turner of Fairweather Turner in North Sydney has various tourism and leisure clients who are unhappy about the rising costs. 

“Insurers charged too cheap a premium, and now they are far too expensive,” he said. Confirming a trend that ICA’s Alan Mason mentioned at a recent conference in Brisbane, Mr Turner said much of his company’s liability business is going to Lloyd’s of London. “It’s cheaper and there is no GST.” 

Mr Turner also added that there is a strong correlation between the introduction of “no win, no pay” contingency fees for lawyers and the dramatic increases in premiums.  “Contingency fees have a lot to do with the increases because they encourage people who normally wouldn’t go to court because of financial costs to have a go at claiming some compensation,” he said.  

But some insurers and underwriting agencies believe brokers should also acknowledge that rates rose as long ago as 18 months, and that many switched their clients’ business to cheaper sources like HIH.

Paul Vlahos from Triton Underwriting said some premiums were just too cheap for leisure and tourism clients seeking public liability cover. “They cannot offer the same prices as last year,” he said.