Commercial insurance market failure - PSA liabilities insurance Sector Survey

Sector Survey regarding NGO’s PSA liabilities insurance arrangements and views to support the development of SA’s longer-term solution.

What's being decided?

The South Australian Government is developing a longer-term solution for Physical and Sexual Abuse (PSA) liability coverage to support non-government organisations (NGOs) delivering critical services to children and young people in care on behalf of the government.

The South Australian Government Financing Authority (SAFA), on behalf of the South Australian Government, is facilitating these activities and invites you to share your ideas to help inform South Australia’s development of the longer-term solution.

Background

Following the Royal Commission into Institutional Responses to Child Sexual Abuse, South Australia (SA) introduced the Civil Liability (Institutional Child Abuse Liability) Amendment Act 2021. As a result, many insurers have exited the commercial insurance market due to the increasing exposure to claims in this space. This has made it difficult for NGOs to secure PSA liability coverage both within SA and Australia.

In August 2021, the Community Services Ministers of each territory and jurisdiction established an Inter-Jurisdictional Working Group (IJWG) to identify possible solutions. The IJWG engaged Finity Consulting Pty Ltd (Finity) to investigate options for a long-term solution. Finity produced two reports, with the final report setting out national design principles that governments could consider in supporting affected organisations. Each state and territory have assisted their respective NGOs (via insurance or indemnity) in a manner that aligns with their risk appetite.

In SA, a short-term indemnity arrangement was developed to ensure the continuity of critical services being delivered by NGOs on behalf of the government, such as Out of Home Care (OOHC) and Youth Homelessness to vulnerable children and young people in care. The arrangement, facilitated by SAFA, is in place until 30 September 2025.

Efforts are now underway to develop a longer-term, South Australian specific solution and we welcome your input.

SAFA has engaged an external firm, DemocracyCo, to lead the consultation process and support with the collection and analysis of important information that will be used to inform the consultation and longer-term solution.

What are the next steps?

Following this survey, consultation workshops will be held for NGOs to deliver feedback, provide further information and raise issues that may not have yet been considered.

SAFA, in conjunction with Democracy Co, will consider the feedback collated to inform the format of the workshops.

Feedback received from the survey and workshops will inform SAFA in developing the longer-term solution.

Sector Survey regarding NGO’s PSA liabilities insurance arrangements and views to support the development of SA’s longer-term solution.

What's being decided?

The South Australian Government is developing a longer-term solution for Physical and Sexual Abuse (PSA) liability coverage to support non-government organisations (NGOs) delivering critical services to children and young people in care on behalf of the government.

The South Australian Government Financing Authority (SAFA), on behalf of the South Australian Government, is facilitating these activities and invites you to share your ideas to help inform South Australia’s development of the longer-term solution.

Background

Following the Royal Commission into Institutional Responses to Child Sexual Abuse, South Australia (SA) introduced the Civil Liability (Institutional Child Abuse Liability) Amendment Act 2021. As a result, many insurers have exited the commercial insurance market due to the increasing exposure to claims in this space. This has made it difficult for NGOs to secure PSA liability coverage both within SA and Australia.

In August 2021, the Community Services Ministers of each territory and jurisdiction established an Inter-Jurisdictional Working Group (IJWG) to identify possible solutions. The IJWG engaged Finity Consulting Pty Ltd (Finity) to investigate options for a long-term solution. Finity produced two reports, with the final report setting out national design principles that governments could consider in supporting affected organisations. Each state and territory have assisted their respective NGOs (via insurance or indemnity) in a manner that aligns with their risk appetite.

In SA, a short-term indemnity arrangement was developed to ensure the continuity of critical services being delivered by NGOs on behalf of the government, such as Out of Home Care (OOHC) and Youth Homelessness to vulnerable children and young people in care. The arrangement, facilitated by SAFA, is in place until 30 September 2025.

Efforts are now underway to develop a longer-term, South Australian specific solution and we welcome your input.

SAFA has engaged an external firm, DemocracyCo, to lead the consultation process and support with the collection and analysis of important information that will be used to inform the consultation and longer-term solution.

What are the next steps?

Following this survey, consultation workshops will be held for NGOs to deliver feedback, provide further information and raise issues that may not have yet been considered.

SAFA, in conjunction with Democracy Co, will consider the feedback collated to inform the format of the workshops.

Feedback received from the survey and workshops will inform SAFA in developing the longer-term solution.

Page last updated: 05 May 2025, 11:43 AM