CRIS has summarised key insights from two recent global reports from Praesidium: their 2024 Insurance Carrier Benchmarking study, which surveyed insurers directly on abuse liability coverage and underwriting expectations, and their 2026 report, which draws on broader claims data, incident analysis and industry trends.
While both reports are US-focused, the themes are highly relevant to the Australian market. Together, they show how insurers are approaching abuse liability risk and where pricing, capacity and underwriting expectations are heading. They highlight a shift beyond policy compliance toward demonstrable, day-to-day risk management, as well as changes in the nature of the risk itself. These changes have important implications for organisations seeking to maintain access to coverage over the coming years.
The insurance market for abuse liability (sexual abuse and molestation liability, or SML) is tightening, with reduced insurer appetite, lower limits and more disciplined underwriting. These conditions are expected to continue, resulting in ongoing pressure on pricing, coverage availability and overall capacity, trends which are increasingly evident across Australia.
2024 Carrier Benchmarking Study: How Insurers are Responding
The 2024 benchmarking study provides direct insight into how insurers are underwriting abuse liability risk and how their approach is evolving.
Coverage and Market Conditions
All surveyed insurers offer some form of abuse liability coverage, but there is a clear trend toward more controlled program structures. Limits are generally modest, with most insurers offering $5M or less, and relatively few are willing to deploy larger limits. There is also a growing use of standalone policies and claims-made structures, reflecting insurer concerns around long-tail exposure.
At a market level, insurers are signalling continued tightening conditions. Many expect reduced appetite for certain higher-risk sectors and anticipate downward pressure on limits alongside increasing pricing and retentions.
Underwriting Expectations
One of the strongest themes is the increasing rigour in underwriting. Nearly all insurers now have defined requirements around abuse prevention, covering areas such as employee screening, training, policies, incident response and supervision.
Importantly, the relative importance of these areas has shifted. While policies remain necessary, they are no longer sufficient. Insurers place greater emphasis on how organisations monitor and supervise activities, how effectively they screen staff and volunteers, and how consistently they train and respond to issues.
This reflects a broader change in mindset, that underwriting is moving beyond assessing whether policies exist and toward assessing whether controls are functioning in practice.
Risk Mitigation and Insurer Support
Most insurers provide some form of value-add risk services including training, policy templates, risk assessments and crisis response support. However, the research suggests these services are not always fully utilised by insureds, highlighting an opportunity for organisations to strengthen their risk profile.
Accreditation and Differentiation
A strong observation from the study is the importance of third-party accreditation. The vast majority of insurers indicated that independent validation of abuse prevention practices would positively impact insurability, including the ability to secure better pricing or higher limits.
This suggests that external validation is becoming an increasingly important way for organisations to demonstrate quality and reduce perceived risk.
2026 Praesidium Report: How Risk and Expectations are Evolving
The 2026 report complements the insurer data by examining claims trends, incident patterns and broader developments across sectors.
From Policy to Practice
A central theme is the growing gap between policy and practice. While most organisations report having formal policies in place, fewer can provide demonstratable evidence that those policies are consistently applied in day-to-day operations.
As a result, expectations are shifting. It is no longer enough to demonstrate intent through documentation. Insureds are increasingly expected to show evidence that controls are working in practice. This includes supervision, leadership accountability, reporting culture and measurable outcomes.
Claims Severity and Long-tail Exposure
The report highlights the significant financial exposure associated with abuse claims, with average payouts reaching into the tens of millions of dollars. These claims are also often long-tail, with incidents reported many years after they occur, adding further uncertainty for insurers.
A recurring theme in the data is that many incidents stem from failures in execution, particularly in supervision or response, rather than a complete absence of policies.
Changing Nature of Risk
The report also identifies a shift in how abuse risk presents. There has been a notable increase in non-contact and digitally facilitated abuse, reflecting broader societal changes.
At the same time, as controls improve in traditionally higher-risk environments, incidents are increasingly occurring in more routine settings such as classrooms or general program spaces. The nature of the risk is changing, so organisations need to regularly review and adapt their prevention and safeguarding practices.
Emerging Insurer Expectations
From an insurance perspective, this is driving a clear shift toward evidence based underwriting. Insurers are increasingly looking for:
- Demonstrable supervision practices
- Effective and applied training
- Clear accountability structures
- Evidence of continuous improvement.
There is also growing pressure from regulators, communities and insurers alike for organisations to be able to show that their safeguarding systems are functioning effectively.
Overall Implications for Australian Organisations
While the data is US-based, the trend is clear and consistent with developments across Australia. The market is moving away from a model based on policy compliance toward one focused on operational effectiveness. Organisations that rely solely on documentation are likely to face increasing scrutiny, while those that can clearly demonstrate how their controls operate in practice will be better positioned.
In practical terms, this means:
- Stronger scrutiny at renewal
- Ongoing pressure on pricing and limits
- Greater differentiation between higher and lower quality risks
At the same time, there is a clear opportunity. Organisations that invest in robust safeguarding frameworks and who can demonstrate that those frameworks are embedded in day-to-day operations are more likely to achieve favourable outcomes in an increasingly challenging insurance environment.
Download the Praesidium 2024 Insurance Carrier Benchmarking Report for a closer look at insurer approaches to abuse liability coverage and underwriting expectations.
Download the Praesidium 2026 Report for insights drawn from claims data, incident analysis and industry trends, including how abuse risks and safeguarding expectations are changing.