Increasing Liability Insurance Rates Linked To Litigation
17th Feb 2020
The chief executive of the Australian Institute of Company Directors said the rise of class action litigation is boosting the cost of liability insurance.
Angus Armour said “[c]olleagues in London and New York are telling me that Australia has become a hunting ground for class actions.” Armour linked this to the skyrocketing cost of directors and officers liability, which he said has “increased astronomically” recently, some premiums by “hundreds of per cent.”
The rising rates can have a “cascading effect” on the cost of insurance for smaller companies and not-for-profits, potentially leaving them uncovered.
Though he said class actions were designed to give people with “a reasonable cause” to seek redress, Armor said “when we stand out, like we do globally, for class action activity, you have to wonder if we have got the policy settings right.”