The Victorian Government has introduced new requirements for all non-government organisations funded by the Victorian Government to deliver services to children. The new requirements came into effect on 1 July 2019 and have been introduced to improve the ability of child abuse survivors to bring a legal claim for compensation against organisations and to ensure that there is something for survivors to claim against.

Required non-government organisations must be incorporated and must be insured against child abuse. The requirements will only be applicable to new or varied funding agreements with the Victorian Government. Existing agreements are not affected. In the case of contracts under an established funding round, the new requirements will apply only after the commencement of the next funding round.

Why are the requirements being introduced?

The Betrayal of Trust Report and the Royal Commission into Institutional Responses to Child Sexual Abuse identified the need for governments and institutions to prevent child abuse and to empower survivors to receive the support and compensation they deserve. One of the key findings in these inquiries was that it has not always been straightforward for survivors of abuse to identify an appropriate legal entity to bring a claim against and even when an entity was able to be identified, some did not have sufficient assets to be sued or to meet compensation orders.

The Betrayal of Trust Report recommended that the Victorian Government require non-government organisations that it funds for delivery of services to children to be incorporated and appropriately insured. The Royal Commission recommended that all state and territory governments require those they fund to maintain appropriate levels of insurance to cover claims of child abuse.

How does an organisation becoming incorporated?

There are a number of ways in which an organisation can become incorporated, including through Consumer Affairs Victoria or through the Australian Securities & Investment Commission. Incorporation can be a complicated process and legal advice should be sought to ensure the organisation has the ability to continue to fulfil its purposes.

Not being incorporated will not necessarily preclude an organisation from entering into a funding agreement with the Victorian Government. Funding agreement may still be entered into with an unincorporated organisation if it is actively working towards incorporation and will incorporate within 12 months of the commencement of the new contract.

What level of Insurance is required?

The Victorian Government requires that insurance is held on an ‘occurrence’ basis, or on a ‘claims made’ basis if it is to be maintained after the cessation of the funding agreement with the Victorian Government. Any exclusions in the insurance must be agreed to by the Victorian Government. A minimum insured amount of $5 million per claim or $10 million in the case of insurance for a monetary aggregated amount is required unless the Victorian Government determines that a higher level is required for a funding agreement.