State governments are being forced to strike confidential deals granting taxpayer-funded indemnity to church bodies for child abuse after an inundation of survivors’ claims led commercial insurers to abandon religious institutions in droves.
In Queensland alone, the state government has now brokered temporary deals to offer indemnity for child abuse claims relating to 18 organisations providing out of home care and youth homelessness services, including Anglicare Southern Queensland and another four church or faith-based groups.
The indemnity deals guarantee to pay out survivors on their behalf where institutions are financially unable to do so.
The intervention has been forced by the sudden failure of the private insurance market to cover churches and other non-government organisations providing out of home care services and youth homelessness services over child abuse claims.
Insurers largely abandoned the field after landmark reforms in 2021 removed the time limit that previously barred many survivors from seeking justice in the courts. The reforms led to a sharp increase in child abuse claims.
Without insurance, state governments feared that church-affiliated and non-government bodies would cease providing critical out-of-home care and youth homelessness services. Governments like Queensland’s are heavily reliant on non-government organisations to provide such services to vulnerable children.
The indemnity deals in Queensland apply only to out-of-home care and youth homelessness services which are funded by the government. The deals are also temporary and are expected to cease in September.
The state’s minister for children, Leanne Linard, said multiple jurisdictions were now trying to grapple with what she described as a “market failure”.
“If claims are made that providers are unable to meet, people who have experienced physical and sexual abuse miss out,” Linard said.
“The market failure for physical and sexual abuse insurance for out-of-home care and youth homelessness services is a national issue and we are working with other states and territories on a range of options to achieve a longer-term solution.”
Survivors and survivors’ groups have expressed alarm at the existence of taxpayer-funded indemnity deals.
The Blue Knot Foundation questioned whether such arrangements allowed church bodies to avoid accountability for decades of systemic failures to protect children from abuse.
“Surely this should be the moral, financial and legal responsibility of the institution under whose watch children were harmed?” the foundation’s president, Cathy Kezelman, said. “Arguably taxpayers would be concerned that their money is being used to enable a powerful institution to effectively abrogate its responsibilities.”
The precise nature of the deals are confidential and details of any payouts are kept secret. The existence of one agreement, between the Queensland government and Anglicare Southern Queensland, was revealed in correspondence from Linard to the federal Greens MP Elizabeth Watson-Brown, who had queried the arrangements on behalf of a constituent.
Linard responded that the agreement was “subject to a confidentiality agreement”, which was necessary to “manage broader public policy concerns about the extent to which governments are expected to intervene in circumstances of commercial market failure”.
But she wrote that the deals were necessary to ensure that critical support services for vulnerable children were not compromised.
“Without [physical and sexual abuse] coverage many child protection and youth homelessness service providers would be exposed to uninsured claims,” Linard replied. “If claims are made that providers are unable to meet they may be forced to shut down, which would severely affect service delivery to vulnerable children and families.”
The chief executive of Beyond Abuse, Steve Fisher, a survivor of child abuse, was shocked by the indemnity arrangements, questioning how church groups could claim they were unable to pay, given their extensive assets and global wealth.
“If they can’t get insurance, that’s their problem,” he said. “Use some of the hundreds of millions that they’ve got in the bank to pay these claims.
“It sounds like they’re basically holding the government to ransom by saying if you don’t do it, then we’ll have to close down.”
Kezelman said she was concerned by the secretive nature of the indemnity deals.
“The royal commission showed us repeatedly the cost of secrecy and lack of transparency, as the harm inflicted was perpetrated in the dark,” she said.
The revelation follows reports in the Australian that the Catholic church’s insurer may be forced to wind down its own operations unless bailed out by its members to cover the cost of sexual abuse cases.
• In Australia, children, young adults, parents and teachers can contact the Kids Helpline on 1800 55 1800, or Bravehearts on 1800 272 831, and adult survivors can contact Blue Knot Foundation on 1300 657 380. Other sources of help can be found at Child Helplines International
