Prompted by concerns by local businesses, community organisations and owners corporations in the ACT, on 22 January 2025 the Standing Committee on Economics, Industry and Recreation initiated an inquiry into rising insurance costs in that jurisdiction.

The Standing Committee heard evidence from 51 people and organisations. These included the ACT Government, peak bodies for insurers, lawyers, brokers, unions, community groups and a variety of local businesses and interested individuals.

The Standing Committee’s report was tabled and published in September 2025 and contained recommendations to the ACT Government about ways in which the ACT insurance scheme could be improved to decrease expense.

The ACT Government has now published its response to the Standing Committee’s recommendations. In general terms, the ACT has agreed to investigate limiting claim costs in the ways suggested by the Standing Committee, but does not agree to interfere with the insurer’s prerogative to assess risk and set premiums, or interfere in the market by providing information or services to insurance customers.

In summary:

1. The Standing Committee made a number of recommendations to achieve the outcome of reducing claim costs.

The ACT Government agreed to undertake a review of those elements of claims ‘in principle’, with a caveat that any policy reform would follow a process of development, stakeholder consultation and budgetary analysis. Those elements are:

1. 1. whether a statutory cap should be introduced for personal injury claims;
   2. whether a statutory cap should be introduced for legal fees relating to insurance claims;
   3. the introduction of proportional liability to claims for workers compensation (that is, that an employer who causes 50% of an injury, say, would only be liable for 50% of the damages arising from that injury);
   4. contributory negligence, particularly in statutory workers’ compensation claims;
   5. aligning ‘journey’ claims to other Australian jurisdictions, that is removing them from the workers compensation scheme and leaving them in the motor accidents injuries scheme except where there is a ‘real and substantial’ connection between employment and the circumstances of the injury;
   6. the viability of subsiding workers compensation premiums that cover apprentices; and
   7. ways to strengthen access to, and engagement in, alternate dispute resolution for workers compensation claims.

The ACT Government agreed to investigate policy options that would allow or facilitate ‘insurance pooling’ for community organisations using public facilities

The ACT Government also agreed that there ought not be a blanket rule that $20 million in public liability insurance is required before government facilities are accessible, saying that this was the government’s existing policy.

2. The Standing Committee recommended a number of ways that, in its view, premiums could be reduced directly, and more information could be supplied by the government to assist people to procure insurance. The ACT did not agree to these recommendations. They were:
   1. a cap on increases to insurance premiums. The ACT Government rejected this recommendation as it may have ‘unintended consequences’ including cross-subsidisation and reduce the incentives of performance-based pricing;
   2. equalising insurance premiums for taxis and rideshare vehicles (which was rejected for the same reason) and making changes to data collection in relation to motor vehicle accidents; and
   3. establishing both an insurance literacy program and website allowing a comparison between insurers. The response cited the existing support given to small businesses and said that these efforts would not yield benefits in proportion with the cost of the exercise.

3. A number of other recommendations were noted without any commitment to take further action. These were:
   1. whether any advertising for legal services on a ‘no win no fee’ basis must include a statement that the customer is liable to pay disbursements and potentially third-party costs;
   2. requiring insurers to explain premium calculations to purchasers, on the basis that it was beyond the legislative power of the ACT Government to impose such a requirement. The ACT Government noted that information relating to the consideration of risk measures was reported in the annual workers compensation scheme review, and quarterly Motor Accident Injury scheme reports;
   3. providing more funding to community organisations to cover the cost of increasing premiums; and
   4. reviewing the operation of the statutory bar in the Limitation Act 1985.

What is apparent from the Inquiry and the Government’s response is that scheme change in the ACT is likely to be a slow process with the risk, in the interim, that small businesses may not procure any (or adequate) insurance in the ACT to protect them from the risks inherent in their commercial operations.

This article was written by Sarah McJannett, Partner, Adrian Hearne, Senior Associate, and Jessica Evans, Solicitor.