The show must go on: The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) recommends mutual fund for recreation and amusement sectors
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has released the final report evaluating the Australian Amusement, Leisure and Recreation Association’s (AALARA) proposal to establish a Discretionary Mutual Fund (DMF) to provide public liability insurance to the amusement, leisure, and recreation sector.
The report found that due to a hardening insurance market, operators within the sector were struggling to obtain public liability cover.
“With only one insurer willing to provide coverage to these businesses, insurance premiums have risen – and many businesses have been refused coverage outright.”
The final report supported AALARA’s proposal, finding that in light of the difficulties facing the sector a DMF was “the only current workable solution to the immediate need for coverage in the sector”.
The report also highlighted the need for strong risk-management across the sector “A DMF is not a magic fix” the Ombudsman said, “it requires an ongoing sector-wide commitment to best-practice risk mitigation measures, the need to ensure membership remains cohesive and acts in the best interests of other members”.
The DMF would also be reliant on support from all levels of government with legislative reform required to ensure that cover through the DMF is accepted in lieu of traditional insurance arrangements.
NIBA provided a submission to the interim report, supporting the DMF in principle, whilst also highlighting the need for better risk management and a review of the DMF’s reliance on re-insurance during the first few years.