A federal parliamentary inquiry into small business insurance has placed tort reform squarely on the agenda, with the Insurance Council of Australia calling it the single most important action the government could take to address affordability and availability of cover.
Insurance Council CEO Andrew Hall told the Joint Committee on Corporations and Financial Services in May that reinsurers now view Australia as the most litigious market in the world, a position he argued surpasses even the United States. Hall cited the compounding effects of rising legal fees, expanding psychological and worker-to-worker claims, and the evolution of how courts apportion liability as the key drivers of pressure on public liability and professional indemnity premiums.
IAG CEO of CGU and WFI Jarrod Hill added weight to the argument, noting that 40% of reserves set aside for liability claims represent “frictional costs” (legal and administrative expenses rather than compensation to injured parties). “There is an opportunity to create a more efficient overall legal framework,” he told the inquiry, “and part of that would be tort reform.”
The insurance industry’s position was challenged by the Australian Lawyers Alliance, which disputed claims of growing litigiousness, arguing that increases in claims reflect legitimate social developments, including better recognition of sexual abuse and asbestos-related injuries, rather than systemic exploitation of the legal system.
The inquiry has heard from a broad cross-section of businesses struggling to secure affordable cover, including adventure tourism operators, tattooists, music publishers, and outdoor recreation groups. A final report is due by 27 October 2026, with questions on notice to QBE, IAG, and NIBA due by 29 May.
For brokers advising clients in high-risk or specialised sectors, this inquiry is worth following closely. Public liability and professional indemnity pricing may have stabilised in 2026, but the underlying debate about whether that holds will be shaped significantly by what emerges from this committee.
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