Vinnies sounds alarm on insurance premiums

The St Vincent de Paul Society has been forced to close services, including shelters for mothers and children, because of legal liability risks and rising insurance premiums.

The Daily Telegraph reported earlier this week that in the past two years, Vinnies has seen its civil liability insurance premium skyrocket from $200,000 to $600,000.

In its submission to Monday's NSW parliamentary inquiry into personal injury compensation laws, the Society's chief executive officer, Owen Rogers, said ever-increasing insurance costs for charities and non-profit groups meant they had to cut services for people in need.

"People in need carry the increased cost by receiving reduced help," Mr Rogers said. "At this point in time, the NSW Government's tort law reforms have had no effect on premiums."

"The extra cost over the past two years [$400,000] means that this amount, which should be used to help needy people, is being used for insurance, especially liability insurance," he told the Telegraph.

Mr Rogers said the society has had to restrict activities involving children because they presented a long-term liability risk if injured. It has also been forced to close or alter some of its hostels because of legal liability risks.

A hostel for mothers and children was forced to close because it could not afford to continue providing supervision at night. The Occupational Health and Safety Act requires the provision of safe shelters from domestic violence.

NSW Law Society president John McIntyre told the paper that the parliamentary inquiry is an opportunity to "expose the hoax behind changes to personal injury compensation laws in NSW".

He said sweeping changes to workers compensation, motor accidents, and civil liability legislation in 1999-2002 were driven by panic over rising insurance premiums and unavailability of insurance.

"The subsequent rebound in the insurance industry demonstrates that this was a cyclical problem, exacerbated by the HIH collapse and the September 11, 2001 terrorist attacks, and not caused by excessive litigation," he said.

Premiums force a cut in charity (Daily Telegraph 2/5/05)

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St Vincent de Paul Society

5 May 2005