Camp park operators turn to discretionary mutual for insurance needs

The Camping and Outdoors Association has commenced work on creating a discretionary mutual fund (DMF) in response to the difficult insurance conditions facing its members.

CEO Daryl Robson says the not-for-profit peak body, which represents campgrounds and farmstays operators, has engaged KJ Risk Group to arrange the program.

KJ Risk, based in Sydney, offers risk management and insurance broking services for clients and is a partner of Austbrokers. Its specialties include DMF and the business is currently working on such a fund for the Australian Apple and Pear Association.

“The insurance market is not accommodating and the best way to say it is the insurance situation is dire,” Mr Robson told insuranceNEWS.com.au. “And hell no, it won’t get better. It will just get worse.”

For many caravan parks and campgrounds businesses it is impossible to acquire public liability insurance cover. Businesses say either premiums are prohibitive or terms for policy coverage are overly strict.

Mr Robson says one operator in north Queensland was informed their premiums would be raised from $265,000 to more than $900,000 and that’s with jumping pillows removed from the site.

“The ones that still have insurance, their premiums would have gone up,” Mr Robson says.

He says the peak body would be providing $2.5 million for the planned DMF’s primary layer of cover and KJ Risk will source for the excess layer of $17.5 million from traditional insurance providers.

“Depending on how quickly the industry wants to get involved, we can get this done in six months,” Mr Robson said.

Interest in DMFs is growing after many businesses – particularly ones from the amusement, leisure and recreation sector – found it difficult to acquire 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 followed the release of a final report from the Australian Small Business and Family Enterprise Ombudsman that concluded a DMF was “the only suitable solution to the critical and immediate need for risk protection in the sector”.

“Without a DMF, there is a real possibility the show cannot go on,” Ombudsman Bruce Billson said in the 2021 report.