Professional Standards Councils are seeking to boost insurer recognition of schemes that act to improve risk management, as the cost of obtaining professional indemnity cover continues to increase in some areas.

The councils, which are backed by state and territory legislation, limit liability for members of participating schemes in return for improved risk management, with requirements including the holding of professional indemnity insurance.

A recent roundtable has tapped into the Insurance Council of Australia (ICA) Business Advisory Council process, established in response to affordability and availability issues in commercial cover.

Professional Standards Authority CEO Roxane Marcelle-Shaw says the roundtable confirmed a “genuine desire for ongoing engagement” between insurers and scheme associations.

“In particular, participants considered there were mutual benefits likely to be obtained from more proactive communication of their experiences – and successes – in managing professional indemnity risk and costs,” she told insuranceNEWS.com.au.

“The Professional Standards Councils are keen to continue this conversation, building on the positive outcomes of the roundtable, and anticipate a follow-up event in 2023.”

Currently there are 18 schemes in force nationally, covering professions including accountants, solicitors, barristers, property valuers, surveyors and those working in strata and information technology. More than 93,000 members were subject to schemes last financial year, up 7.8%.

The roundtable heard that professional standards schemes are unique to Australia and there is an incomplete understanding of the risk management requirements and a lack of visibility around actions embedded by professional firms.

The councils commissioned a report from Taylor Fry, which was submitted earlier this year, to examine the risk benefits of schemes.

Legislation for schemes was introduced in response to the insurance crisis of the 1990s and early 2000s, when a sharp increase in the number and size of claims led to premiums rising to unaffordable levels, resulting in a lack of protection for consumers who were entitled to compensation.

The Professional Services Councils say the regulatory system allows the collection of data about emerging issues, claims and complaints, which is then used to improve practices. Associations must have effective complaints and disciplinary process in place to hold members accountable.

“In return, the members who agree to professional regulation by their occupational association benefit from continuously improving standards of conduct and competence, and the possibility of a limitation of civil occupational liability,” the latest Professional Services Councils annual report says.

Groups represented at the August roundtable included ICA, National Insurance Brokers Association, QBE, Suncorp, Swiss Re Corporate Solutions, Australian Institute of Building Surveys, the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission, CPA Australia, Law Institute of Victoria, and Taylor Fry.