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The insurance industry has won spectacular financial windfalls from Civil Liability Laws following the federal government’s review of negligence laws.

Civil Liability laws have eliminated 70-80% of personal injury claims payments on businesses and household insurance policies.

Laws that exempt reckless enterprises from having to pay the people a name for the true cost of their disability are a subsidy to business. The result is an economic distortion and an insidious form of protectionism that has four major consequences:

  • People who refuse to invest in injury avoidance practices face no economic penalty when an injury results;
  • The distortion penalizes those who invest in safety because it increases the cost of production for the safe business relative to that of the dodgy competitor;
  • The distortion means people who are injured through no fault of their own bear the lifelong cost of the injury;
  • Some of the costs are transferred to the taxpayer through Medicare and public hospital treatment of victims.

Insurance premiums continue to rise and as taxpayers count the increasing cost of caring for accident victims, all four Australian insurers continue to boast record profits.

The financial cost of avoidable injury every year in Australia is now more than $50 billion. Not to mention the personal cost to consumers and their families. Civil Liability laws haven’t reduced the number of injuries – they have just transferred the cost to the victim and the taxpayer.

Civil Liability laws leave individuals and families to suffer the consequences of reckless conduct while insurers’ profits have gone through the roof.

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