Latest News

Back to Latest News back


Ombudsman’s report calls for action in addressing ‘national crisis’ in insurance coverage

Ombudsman’s report calls for action in addressing ‘national crisis’ in insurance coverage
December 29, 2020

The newly released Small Business Ombudsman’s Insurance Inquiry Report has called for urgent action to address what it describes as widespread market failure over the availability and affordability of insurance products for small businesses.

With operators across the leisure industry impacted by insurance companies reducing or removing coverage, introducing significant price hikes, and, in many instances refusing to renew coverage, the report makes 15 recommendations.

Releasing the report, Australian Small Business and Family Enterprise Ombudsman, Kate Carnell stated “we are in the grip of a national crisis that is killing small business

“As a result, far too many Australian small businesses are on the brink of collapse because they cannot secure a range of insurance products necessary for their operation.”\

“Public liability insurance has become almost impossible for small businesses to obtain, particularly those that offer recreational activities such as caravan parks, quad bike tours or jet boating to name a few.”

The inquiry, announced in July, received more than 800 responses to a survey and more than 20 submissions.

Recommendations 5 to 7 refer to the issues of getting public liability insurance, which is inhibiting development and the creation of jobs in leisure and tourism.

Recommendation 7 notes that “where there is only one or no insurers left in a professional indemnity market, the Federal Government should provide an insurance scheme of last resort for small business”.

Small businesses reported uncertainty over how much of a broker’s income came from insurer commissions, with some being “shocked at discovering” their broker had received conflicted remuneration.

The Report proposes conflicted remuneration should be banned with a phased transition period, while noting that a further governmental review is due to take place in 2022.

It states “given the importance of brokers to small business’ access to insurance, the conflicts involved, and the existing confusion over how brokers are paid, conflicted remuneration needs to be urgently addressed.”


Other recommendations call for statutory caps on liability for personal injury and the introduction of a no-fault National Injury Insurance Scheme, reforming fault-based arrangements that are leaving insurers and small businesses facing “uncontrollable risks”.

The Report proposes that the Australian Financial Complaints Authority’s remit be extended so it can cover more small businesses and adjudicate on disputes around products such as public liability and industrial special risks, and calls for industry codes of practices to be mandatory.

It all calls for insurance product documentation to set out the most common mitigations businesses can make to reduce premiums and ensure coverage, clearly list exclusions, set out common reasons why claims are denied, use standard definitions and, in the case of foreign insurers, be written in Australian legal terminology.

Among industry operators, the Caravan Industry Association of Australia says many of its members are “against the ropes” following the bushfire season and COVID-19 travel restrictions and backs the proposed ARPC reforms and public liability cap.

Welcoming the report, Caravan Industry Association of Australia Chief Executive, Stuart Lamont stated “the Ombudsman’s acknowledgment of market failure and the need to provide certainty to small business operators is a welcomed and accurate summary of the current insurance sector.”

The Association advises that caravan park operators, who are fully regulated by relevant state and federal legislation regarding work health and safety, are not seeking to avoid their responsibility regarding public liability and natural disaster management. They are, however, seeking a consistent framework that ensures their significant investments and liability are able to be protected.

Lamont added “the recommendations by the Ombudsman are a step in the right direction to support the caravan park industry. Specifically, Expanding the Australian Reinsurance Pool to cover all-natural disasters and adopting statutory caps on public liability will provide ongoing confidence to operators that they will be able to find and be covered by adequate policy.”

The Insurance Council of Australia says the report identifies many important issues and recommends measures which are to be welcomed as part of the public policy debate.

National Insurance Brokers Association (NIBA) Chief Executive, Dallas Booth says the report reflects the current hard market and wider community discussions over challenging areas, but broker commissions are not the problem and there are clear obligations on them to avoid conflicts of interest.

Booth advised “brokers are working very hard to get cost-effective cover for their clients.

“We have not seen evidence of broker remuneration causing client detriment. If there is evidence of that, we are keen to see it, and we will identify the root cause and find ways to deal with it.”

Western Australia's Small Business Commissioner David Eaton wrote to the Ombudsman in July highlighting concerns about lack of access to insurance for small businesses who were struggling to recover from the impact of COVID-19.

Following the release of the Report, Western Australian Minister for Small Business and Minister for Tourism, Paul Papalia stated “small businesses need access to support from all areas to ensure their ongoing survival during and beyond the COVID recovery period.

"Access to quality and affordable public liability insurance is critical for small businesses in both Western Australia and across the nation.

"The Ombudsman's Insurance Inquiry Report makes strong recommendations for a national approach to resolve this issue that is threatening to severely affect small businesses all over Australia.”

The Australian insurance market has been hardening for several years, as global insurers adapt their risk weightings to increasing threats. Climate change impacts mean that, increasingly, businesses in rural and regional areas are unable to secure against fires and floods, leaving businesses like country pubs and camping sites uninsured.

Rising levels of litigation has led to tourism businesses including horse riding, jet boating, amusement parks and show ride operators being seen as ‘too risky’ to cover while international disasters such as the Grenfell tower fire in London have changed insurer’s views of the building sector, leaving geotechnical engineers and certifiers unable to secure the insurance they need to maintain their licences and registrations.

Carnell concluded “there is market failure that will have extreme consequences for the Australian economy if left unaddressed.

“The recommendations in this report are designed to provide much needed clarity and certainty for small businesses, rebalance risks for insurers, and allow businesses access to the insurance products to protect themselves for when things go wrong.”

Click here to read the ASBFEO Insurance Inquiry Report December 2020.

Images: Kate Carnell (middle) and caravan park operators are “against the ropes” according to the Caravan Industry Association of Australia (below, credit: Brisbane Showgrounds).

About the author

Nigel Benton

Co-owner / Publisher, Australasian Leisure Management

Nigel Benton is the co-owner and publisher of Australasian Leisure Management, Australia and New Zealand’s only magazine for professionals in all areas of the leisure industry. Having established the magazine in 1997, shortly after his relocation to Australia, he has managed its readership rising to over 11,500 and its acceptance as the industry journal for professionals in aquatics, attractions, entertainment, events, fitness, parks, recreation, sport, tourism and venues.

As of 2020, he has launched the new Asian Leisure Business website.

Among a range of published works and features, his comments on a Blog (blogspot) from 2007 to 2011, when this website went live in its current form, may be interesting to reflect back on.

Click here to connect with him via LinkedIn.

Read more from this author

Related Articles

10th December 2020 - Insurance crisis set to force closures of Australian attractions and adventure tourism businesses

18th November 2020 - AALARA takes action as attractions operators face public liability issues

16th November 2020 - Industry operators impacted by rising insurance premiums

22nd October 2020 - Festival promoters call for Federal Government insurance scheme

25th June 2020 - Interest in domestic tourism results in increased caravan sales

12th June 2020 - Insurance refusals impacting adventure tourism operators

27th May 2020 - AALARA releases guide for the reopening of Australia’s attractions industry

5th May 2020 - Holiday parks provide safe travel options as lockdown eases

4th February 2020 - Worksafe Queensland prosecution results in $50,000 fine following inflatable amusement ride injury

28th June 2019 - Ardent Leisure facing potential $80 million liability in wake of Dreamworld inquest

26th March 2019 - Ballarat swimming academy fined $150,000 after student’s life changing diving injury

15th September 2018 - Commercial trampoline centre operators struggle to secure insurance

15th February 2018 - Injury experts call for mandatory regulation to improve indoor trampoline park safety

25th May 2016 - Sports injury hospitalisations higher in regional Australia

26th June 2015 - Leisureinsure Australia not accepting new business or renewals

3rd April 2015 - Sportscover focusing on expansion following approval of Hamilton deal

19th May 2015 - Perisher Blue escapes liability for skier’s injury but needs a new disclaimer

30th December 2014 - Queensland entrepreneur launches new adventure tourism insurance company

5th November 2014 - Football codes the leading cause of hospitalised sports injury

4th July 2014 - Sportscover nominated as Employer of the Year

11th April 2014 - Concerns over fitness clubs failing to comply with injury minimisation guidance

4th May 2011 - Amusement Ride Static and Transit Insurance

Asking a small favour
We hope that you value the news that we publish so while you're here can we ask for your support?

The news we publish at is independent, credible (we hope) and free for you to access, with no pay walls and no annoying pop-up ads.

However, as an independent publisher, can we ask for you to support us by subscribing to the printed Australasian Leisure Management magazine - if you don't already do so.

Published bi-monthly since 1997, the printed Australasian Leisure Management differs from this website in that it publishes longer, in-depth and analytical features covering aquatics, attractions, entertainment, events, fitness, parks, recreation, sport, tourism and venues management.

Subscriptions cost just $90 a year.

Click here to subscribe.


supplier directory

The Complete Guide to Leisure Industry Products & Services.

See the directory see all

Worldwide Sports Management

Principal Consultant Simon Weatherill has spent the last 20 years developing the world renowned Melbourne Sports Hub, as former Chief Executive Officer of the State Sports Centres Trust…

read more

Aquatics / Consultants / Recreation / Sport / Venues


Felton Industries

Felton Industries is Australia’s leading designer, manufacturer and supplier of quality outdoor furniture and has been supplying premium seating solutions for all sporting, commercial, community…

read more

Parks / Play / Recreation / Sport / Venues



At easyemployer we've come up with a software solution that manages one of your most important, and often most costly, business resources - your staff. We are helping 100s of clients to…

read more

Finance / Fitness / Technology



As of 2018, TicketServ operates as SeatGeek Asia Pacific Pty Limited, part of international ticketing platform SeatGeek. Click here to contact SeatGeek Asia Pacific via their entry in…

read more

Attractions / Entertainment / Events / Sport / Ticketing


TJS Services

TJS Services is a leading national facility services provider. We deliver quality cleaning, maintenance, construction and facility management services to over 1,500 sites Australia wide.  Our…

read more

Hospitality / Retail / Venues


The P.A. People

The P.A. People is a specialist integrator and contractor in sound reinforcement, audio visual systems, performance lighting and production communications. Over its almost 50 year history the company…

read more

Entertainment / Events / Sport / Technology / Venues



Centaman has been a market leader in Enterprise Software Solutions for the leisure and recreation industry and both profit and not-for-profit attractions since 1991. It offers a wide range of software…

read more

Access / Billing / Fitness / Technology / Ticketing


get listed with our suppliers directory

Get your business noticed in our targeted directory. Viewed by 10,000 industry professionals per week!

list your business