The insurance struggles facing coal and other fossil fuel-related businesses remain severe more than three years after a parliamentary inquiry examined the matter, CRE Insurance Broking director Adam Battista says.

He says insurance is still available for such businesses but coverage comes at a high price.

“Those challenges that were identified in the inquiry have not gone away,” Mr Battista told insuranceNEWS.com.au. “It has actually been compounded during that time.”

Premiums often come with a “a moral loading”, he says. “It’s no longer being priced on the risk, it’s being priced on its perceived moral challenge, so to speak.”

The Joint Standing Committee on Trade and Investment Growth released a report in December 2021 following its inquiry into the prudential regulation of investment in Australia’s export industries.

It made recommendations to address the business challenges facing the coal and resources sectors, one of which suggested creating a self-funding insurance model that meets the needs of resource companies, contractors, suppliers and associated export infrastructure.

The federal government's response to the report was released this week, giving the same answer to all 13 recommendations: “The government notes this recommendation. However, given the passage of time since this report was tabled, a substantive government response is no longer appropriate.”

Mr Battista says the tone of the government’s response gives the impression the suggestions have not been considered at all.

“Those recommendations were very critical, I thought,” he said. “They sat on that report for three years without responding and now say it’s not relevant. I just think it’s been completely dismissed.”

CRE Insurance Broking specialises in energy and renewables, engineering and manufacturing, construction, and mining and natural resources.

Mr Battista says the broker procures insurance programs for fossil fuel clients from insurers in the US, Europe, Asia and locally. But the coverage terms are often onerous.

“Clients generally use a blended solution to transfer and mitigate their risk … there is a far stronger requirement for them to retain more on their balance sheets through big retentions, and [more] excesses and coverage carveouts than any other industry we represent.”

The insurance crunch has hurt sub-sectors more than the heavyweight fossil fuel companies, he says.

“It’s the supporting businesses that really get caught up. They need the insurance, the big boys have the balance sheets to sustain losses. The 1-3 asset owners and operators, services to the industry and the local communities reliant upon the supply chain, they are the ones who are feeling it most.

“It’s very difficult to be regularly in these communities and not be moved to have a ... voice for that hardship, particularly in the face of the government’s insipid response to this inquiry’s recommendations.”

Bravus Mining & Resources, the Australian subsidiary of India’s Adani Group, says its Carmichael mine has the requisite insurance and has been producing and exporting coal for more than two years.