Small businesses are already “well protected” when it comes to unfair contract terms in general insurance contracts, the Insurance Council of Australia (ICA) has told a Federal Government review. 

The Insurance Contracts Act 1984, the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001 “collectively provide equivalent, if not greater, protections to small business from unfair contract terms”, its submission says.

The Government is reviewing whether small businesses should be afforded the same protections as consumers from unfair contract terms.

ICA says it is not aware of any complaints from small businesses about unfair terms in general insurance contracts, and warns introducing regulations will create “unwarranted layering of regulatory requirements on insurers”.

“The application of an unfair contract terms remedy to insurance contracts rather than assisting small businesses will create uncertainty in the application of insurance terms to claims, which will likely lead to further disputes, resulting in inconvenience and delay, increasing costs and possibly premiums.”

ICA “strongly” urges the Government to retain the current exemption from unfair terms legislation under Section 15 of the Insurance Contracts Act.