The Camping and Outdoors Association began work on creating a discretionary mutual fund (DMF) in response to the difficult insurance conditions facing its members.
CEO Daryl Robson said the not-for-profit peak body, which represents campgrounds and farmstays operators, had contacted KJ Risk Group to organize the programme.
KJ Risk, based in Sydney, offers risk management and insurance broking services for Austbrokers clients and partners. Its specialties include DMF and the business is currently working on such funding for the Australian Apple and Pear Association.
“The insurance market is unacceptable and the best way to say it is the insurance situation is difficult,” Mr Robson told insuranceNEWS.com.au. “And hell no, it won’t get better. It will only get worse.”
For many caravan parks and camping grounds businesses, it is impossible to get public liability insurance coverage. Businesses claim that either the premiums are prohibitive or the terms for policy coverage are too restrictive.
Mr Robson said an operator in north Queensland had found their premiums would be raised from $265,000 to more than $900,000 and that was to remove jumping pillows from the site.
“Those who still have insurance, their premiums would have gone up,” Mr Robson said.
He said the peak body will provide $2.5 million for the planned DMF’s primary layer of cover and KJ Risk will source an additional layer of $17.5 million from traditional insurance providers.
“Depending on how quickly the industry wants to get involved, we could do it in six months,” Mr Robson said.
Interest in DMFs is growing after many businesses – especially those from the recreation, leisure and entertainment sector – have found it difficult to obtain insurance.
Last December, the Business Council of Co-operatives and Mutuals released its first voluntary code of conduct for operators of DMFs.
The code of conduct follows the release of a final report from the Australian Small Business and Family Enterprise Ombudsman which concluded that the DMF is “the only appropriate solution to the critical and urgent need for risk protection in the sector”.
“Without DMF, there is a real possibility that the show will not go ahead,” Ombudsman Bruce Billson said in the 2021 report.
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