New mandatory product safety reporting requirements will be a “double-edged sword” for product liability insurers, according to a legal expert.

From January 1 next year businesses will have to notify the Australian Competition and Consumer Commission (ACCC) when a product they have supplied has caused, or may have caused, serious injury, illness or death.

Annette Hughes, a partner at law firm Allens Arthur Robinson, says the breadth of the new reporting requirements means the ACCC must be notified at a much earlier stage.

“People will be reporting out of an abundance of caution,” she told insuranceNEWS.com.au.

“There may be more insurance claims, and [product] recall claims might be triggered more frequently.”

Ms Hughes says the new regulations apply not just to manufacturers but also to everyone in the distribution chain, and compensation claims are another area likely to rise as more consumers are made aware of the issues.

The administrative burden insurance companies will have to bear will also be greater, but will be weighed against a likely increase in product-recall insurance business.

ACCC Deputy Chair Peter Kell warned Australian businesses to “engage in the consultation process and begin preparing for the implementation of the new laws now”.