Members get more protection with new Scheme covers Back

‚ÄčThe 2020/21 fund year will usher in a new era for the WA local government self-insurance Scheme with the introduction of five new areas of cover.

Designed to give the WA local government sector confidence that their organisations and communities will be well protected now and into the future the new covers will be introduced as the first set in a three stage plan.

Membership of the Scheme will now include cyber liability; management liability; motor vehicle; personal accident; and travel protection under the existing portfolios of Liability, Property and WorkCare. The addition of new classes of civic risk broadens the protection available to members.

Since its inception the Scheme has had to innovate to ensure the continued, sustainable protection of the WA local government sector, often taking on risk and providing covers when the commercial market has no appetite. Not only is LGIS committed to the sustainable protection of the sector but concerted efforts are made to limit contribution volatility by providing relevant risk management support.

The tradition of innovation continues and LGIS has analysed market trends to identify areas where the sector will need greater certainty and sustainability in the future. That's why in 2017 LGIS began to consider more Scheme protections, such as pollution legal liability, and consulted widely across the sector. In 2019 the WALGA State Council provided further direction to broaden the Scheme.

The reasoning behind the State Council's decision was twofold, firstly to create greater clarity in the role of the Scheme and WALGA as its trustee. The second recognised the Scheme's success in providing affordable, sustainable cover for the sector, acknowledging that the commercial insurance market will continue to fluctuate. Broadening the Scheme's protection insulates the sector against this volatility.

The Schemes ability to insulate the sector has been particularly evident in the 2020/21 fund year.

Globally, every organisation has been hit by the pandemic and the resulting economic fallout - from local governments here in WA to the world's insurance market.

This year the pandemic has caused the insurance market to harden more rapidly than anticipated. Prior to COVID-19 insurers were already readjusting their risk appetite and the current situation has seen many move from 'maybe' to a firm 'no', seeing significant price increases.

LGISWA has been able to leverage the size and scale of the Scheme, the buying capacity of the whole sector, to limit the costs of protecting local communities.

Market forces are driving prices and coverage and the Scheme is performing well in this environment. For example, typical price rises for property insurance through the commercial market are currently in order of 23%, driven by bushfires, hailstorm damage, and flooding. Similarly management liability and professional indemnity have sustained increases of 30% in the first quarter of 2020. For LGIS members, these costs have been contained.

Another member benefit of additional Scheme covers is how claims are managed, ensuring that decisions are made with a discretionary philosophy that only a self-insurance mutual can provide.

Effective from June 30 members will receive additional covers as part of a staged approach to broaden the Scheme.

In Phase 1, new protection programs have been added to Scheme membership including; cyber liability; management liability; motor vehicle; personal accident; and travel. These are in addition to the core Scheme protections of Liability, Property, WorkCare and Bushfire Volunteers.

These new covers have been developed with a focus on members' needs to ensure continuity of protection, whilst enhancing the member experience and resisting price volatility. Members' will see further enhancements as the project continues in Phase 2 and 3 that include enhanced claims and risk management.

This is an exciting innovation for the Scheme and provides the WA local government sector with sustainable cover now and into the future.

More information

Full details of the new Scheme cover will be presented to members in their June Renewal Report. For more information please talk to your LGIS Account Manager on 9483 8888 or email