Edition 12/2002
SIA SafeSport Program
An Excellent Initiative
Many
of our Sport Monthly Updates during 2002 have referred to the
liability insurance crisis that has had dramatic impact on sport and
recreation organisations. This,
our final Update for the year, also refers to the liability crisis,
but pleasingly it reports on a very positive initiative on the part of
Sport Industry Australia (SIA) that will not only lead to sustainable
liability insurance premiums but also improved delivery of the sport
product due to best management practices being engrained in industry
culture.
Over
the past eighteen months, SIA has become increasingly concerned about
the changes occurring in the insurance market, and the impact of these
changes on sporting organisations in Australia.
They have contributed a number of submissions on this issue, to
the Assistant Treasurer’s Ministerial Forum; the Review of the Law
of Negligence; the Senate Economics References Committee Inquiry into
Public Liability Insurance, the Senate Economics Legislation
Committee’s Inquiry into the Trade Practices Act Amendment, and
appeared before both committees.
In
addition SIA was on the Management Committee of the Standing Committee
for Recreation and Sport Report on Insurance, has convened a National
Members Forum on the issue, and has presented at a number of
conferences including the IRR National Public Liability Conference,
and the Australian Institute of Actuaries Conference.
While
increasing insurance
premiums are affecting all sectors of the
economy, sport is being particularly hard hit.
The cumulative effect of the various changes in the insurance
market is that many sporting organisations, particularly those
perceived as high risk and/or with poor claims histories, are faced
with huge increases in public liability premiums, or are even having
difficulty in obtaining cover at any price.
|
|
Increases
in premiums will inevitably result in one of three outcomes.
Firstly, the organisations will find the funds to pay the
premiums, either by imposing substantial increases in membership fees
or by diverting funds from other activities within the organisation,
resulting in a reduction in the services offered, or potentially
losing members unable to bear the increased costs of participating.
We have already seen significant membership fee increases
across a number of sports.
Secondly,
organisations will seek to reduce the premiums by reducing the level
of public liability cover (or even operate without insurance), thus
exposing the organisation and its workers to the risk of litigation.
Some organisations, unable to secure insurance from within
Australia, are now sourcing their policies from companies without
thoroughly researching their security and claims paying ratings, a
situation which is clearly unsatisfactory.
Thirdly, the organisations will simply close down, or events
which they organise, which have in some cases been held for many
years, will be cancelled.
This
is already happening, with many events, particularly at community
level, being cancelled, and an increasing number of clubs closing
down. The loss of
sporting events and clubs will impact negatively on the government’s
ability to achieve its desired objectives of a healthy and active
population. Further, our
national identity is inextricably linked to our success in sport, and
to allow the current insurance situation to continue will change the
face of Australian sport by significantly restricting opportunities
for participation at all levels and for all ages, eventually impacting
on our sporting achievements as a nation.
One
of the key areas where sports can influence the way in which insurance
changes are impacting on them is that of risk management.
Many sporting organisations are already aware of the need to
implement adequate and standardised risk management practices to
reduce their exposure to liability actions.
However the approach to this is often haphazard and
inconsistent, and does not put the organisation in a strong position
when negotiating insurance policy renewals.
Continued
....
|
