Lawyers have told a federal inquiry that proposals to tighten civil liability laws in response to higher small business insurance premiums risk reducing injured people’s access to compensation without addressing the main drivers of pricing.
The Australian Lawyers Alliance (ALA) is appearing before the Parliamentary Joint Committee on Corporations and Financial Services as part of its inquiry into insurance products used by small businesses and not‑for‑profit and community organisations.
ALA national president Ian Murray (pictured) said proposals from parts of the insurance sector would limit the ability of injured Australians to obtain compensation for negligence without clear evidence that such changes would ease premium pressures. “Insurers are advocating for significant changes to civil liability laws which will mean that people who have been injured will not be able to receive the support they need to re-build their lives. However, there is no data to support these proposals,” Murray said.
Murray said the ALA recognises the importance of affordable insurance for small enterprises and community groups but argues that cutting back legal rights is not an appropriate policy response. “Before any further reform is considered, we need transparency about what is actually driving insurance premium increases. Reforms must be based on evidence and must not come at the expense of fairness for injured Australians,” he said.
The Parliamentary Joint Committee launched its inquiry in November 2025 to examine how insurance for small businesses and community organisations is provided, regulated, and priced in Australia. The review covers lines including public liability, professional indemnity, cyber, and business interruption cover. It is also examining whether existing products and regulation are adequate for current business and community needs.
The committee is looking at rising premiums and capacity constraints, particularly in sectors such as construction, tourism, and live events, where organisations report difficulty obtaining cover or maintaining previous limits. Written submissions closed on March 6, 2026, and public hearings are underway with insurers, brokers, legal groups, small businesses, and not‑for‑profits. In addition to pricing and availability, the inquiry is considering frameworks for consumer protection, allocation of liability, and the impact of state and federal taxes and levies on the cost of cover.
The ALA’s evidence focuses on the role of civil liability regimes in compensating people injured in public places and workplaces, including public pools, community events, amusement venues, and some employment settings. The organisation argues that proposals to narrow liability or raise access thresholds could reduce avenues of redress for people harmed by negligence. A central element of the ALA’s position is that the economic cost of injury remains even if private compensation is limited. Murray said restricting compensation claims would likely transfer more of the burden to Medicare, Centrelink, the National Disability Insurance Scheme (NDIS), and families. “You don’t eliminate the cost of injury by restricting compensation, you simply move it elsewhere,” he said, adding that this would increase pressure on publicly funded services as well as households.
The ALA has also highlighted the experience of families affected by serious incidents, including the death of 18‑year‑old worker Christopher Cassaniti when a multi‑storey scaffold collapsed on a construction site after safety breaches. His mother, Patrizia Cassaniti, has been speaking to policymakers about the impact of such events and the role of legal processes. “The reality is when a worker goes to work and never comes home, a family’s life is shattered in an instant. Everything changes with one phone call, one knock at the door, one moment that divides life into before and after. My message to the politicians is to please stop and reflect on what families go through. Imagine losing your child. Imagine losing your husband, your wife, your parent. Imagine knowing that their death should never have happened,” she said. The ALA has said it is prepared to discuss changes that improve efficiency in the compensation system, including measures to reduce delay and complexity in claims handling, provided that reforms do not further restrict access to compensation.
Insurers have put forward a different diagnosis of premium trends, nominating legal costs, liability settings, and regulatory requirements as key contributors to higher prices for small business cover. The Insurance Council of Australia (ICA) has told the committee that some small business premiums have risen by up to 60% since 2019 and that, in its assessment, growth in claims costs and associated legal expenses has played a role. The ICA is calling for a national review of liability laws for the first time in around 25 years, including a closer examination of psychological injury trends and litigation activity. It has proposed caps on legal costs and simplified claims processes to limit the share of claim payments used for fees and to resolve claims more quickly.
The council has also asked for a national ban on “claim farming” – practices such as cold‑calling or pressure tactics to encourage lodgement of injury claims – and for changes to government procurement rules so that insurance requirements and contractual liability clauses align more closely with operational risk. “Too much of what should be going to injured people is being eaten up by legal costs, delays, and red tape. It’s been a quarter of a century since anyone properly looked at these laws, and the case for reform is overwhelming,” ICA chief executive Andrew Hall said.
Hall said access to suitable cover affects the operation of local businesses and clubs. “Affordable insurance is what keeps small businesses and community organisations running; when a local café or a community sports club can’t get cover, it’s the local community that loses out,” he said. The ICA has also argued for funded risk‑management programs for small businesses and community organisations to support investment in safety, maintenance, and cyber security, which it says could help reduce losses and claims costs over time.
Insurance brokers, represented by the National Insurance Brokers Association (NIBA), are using the inquiry to raise questions about how small business customers are defined in regulation and how tax and levy structures affect premiums. In a March 2026 submission, NIBA recommended reviewing the definition of “small business” across the insurance regulatory framework and reassessing the list of products prescribed as retail under section 761G(5) of the Corporations Act. The association argues that many small firms buying commercial products such as public liability, professional indemnity, cyber, and business interruption cover do not receive the level of protection that applies when they buy home or motor policies.
NIBA has called for a regulatory impact review specific to general insurance broking, noting that the current advice regime was designed for investment products, and for standardised, plain‑language proposal forms in financial lines to reduce placement costs for SME clients. Its submission also proposes national harmonisation of workers’ compensation obligations, replacement of insurance‑based emergency services levies with broad property‑based charges, and more consistent stamp duty treatment of insurance. On procurement, NIBA has urged governments to set insurance requirements in contracts in line with operational risk and to avoid clauses that create contractually assumed liabilities that are difficult or expensive to insure.
The association has further recommended sector‑specific solutions for higher‑risk not‑for‑profit activities, expanded cyber awareness programs for SMEs, and targeted grants and tax incentives to support investment in physical and cyber risk‑mitigation measures. NIBA representatives, including chief executive Richard Klipin and president Nicholas Cook, are appearing at committee hearings to discuss these recommendations and the role of brokers in placing cover for small entities in a constrained market.
The inquiry brings together debates on liability law, claims processes, distribution regulation, and tax design in one forum. Stakeholders are presenting differing views on how to balance premium outcomes for small businesses and community organisations, the financial sustainability of insurance arrangements, and the rights of injured people. Any government response to the committee’s report could affect product structures, risk selection, pricing strategies, and procurement negotiations across the small business and not‑for‑profit segments of the Australian insurance market.
