NGO Short-Term Indemnity Scheme

The Short-Term Indemnity Scheme (the Scheme) is a temporary measure to assist OOHC and youth homelessness service providers who have been unable to obtain insurance for physical and sexual abuse (PSA) claims.

The Scheme has been created to ensure essential service delivery continues whilst the Department of Communities and Justice (DCJ) works with other jurisdictions and non-government stakeholders on a potential long-term solution to the current lack of availability of commercial insurance for PSA claims.

Under the Scheme, DCJ will provide eligible service providers with a short-term financial indemnity, on a claims-made and notified basis, for PSA claims for incidents that have occurred since 30 June 2017, in connection with delivering contracted OOHC and youth homelessness services on behalf of DCJ.

The indemnity is underwritten by the Treasury Managed Fund (TMF), which is managed by icare on behalf of NSW Treasury. Service providers are required to pay a fee to DCJ to access the Scheme. The scheme will operate until 31 December 2024.

Details of what the Scheme covers and how it operates are outlined in the Program Guidelines.

Enquires about the Scheme can be directed to NGOindemnityscheme@dcj.nsw.gov.au

Non-government organisations contracted to deliver OOHC and/or youth homelessness services on behalf of DCJ, and who have been unable to obtain insurance cover for PSA claims, are eligible to participate in the Scheme.

This includes service providers engaged via fee-for-service to deliver:

• 'Other' OOHC placements, including Alternative Care Arrangements (ACAs), Individual Placement Arrangements (IPA), Overnight Respite under the Casework Support Scheme (CSS) and Special Care placements; or
• Youth accommodation services.

Further information about the eligibility criteria for the Scheme is in Section 3 – Eligibility of the Program Guidelines.

Eligible service providers who wish to apply to the Scheme will need to complete an application which can be found here:

NGO Short-Term Indemnity Scheme application

The application will need to include:

• a claims declaration notifying DCJ and icare of any claims or known incidents or circumstances that could give rise to a claim; and
• evidence of lapsed, declined or expired insurance cover for PSA claims, including the insurer and insurance details and the date cover lapsed, expired or was declined (for example by providing a copy of correspondence from the service provider’s broker or insurer).

Once the service provider’s eligibility is confirmed, DCJ will calculate the service provider’s fee to access the Scheme and prepare an offer of indemnity as either a contract variation letter or a standalone indemnity agreement (depending on the service provider’s contract arrangements with DCJ).

If the service provider wishes to accept the offer, DCJ will issue the contract variation letter or standalone indemnity agreement via DocuSign to the service provider’s nominated authorised signatories for signing.

DCJ will write to all participating service providers whose indemnity agreements expire on 31 December 2023 and invite them to apply to extend their participation for a further 12 months, until 31 December 2024.

Participating service providers will complete the application to extend the period of cover under their organisation’s indemnity agreement. DCJ will then prepare an offer of extension for the service provider to consider.

If the service provider wishes to accept the offer of extension, DCJ will issue a Letter of Extension via DocuSign to the service provider’s nominated authorised signatories for signing.

Service providers will be required to pay a fee to DCJ to participate and/or extend their participation in the Scheme.

The fee will be calculated individually for each service provider and will be determined by the type of program and services the service provider is contracted to deliver, their contracted service levels, and the length of the service provider’s indemnity period.

The indemnity fee will be invoiced.

icare will manage PSA claims on behalf of service providers indemnified under the Scheme.

Service providers should notify icare as soon as they become aware of a PSA claim involving their organisation. Notifications can be made by email to HCAclaims@icare.nsw.gov.au.

Further information about claims management and service provider obligations are outlined in Section 8 – Application and claims management and Section 5 – Conditions and limitations, of the Program Guidelines.

1. Is it mandatory for OOHC and youth homelessness providers to participate in the Scheme?

   Participation in the Scheme is voluntary. It’s an internal decision for individual service providers to make, as to whether they apply to the Scheme and/or accept an offer of indemnity from DCJ.

   Service providers should carefully review the Program Guidelines and the offer of indemnity (where issued) to determine if the cover offered is appropriate for their organisation.

2. Is it mandatory for OOHC and youth homelessness providers to accept an offer of extension?

   Accepting an offer of extension in the Scheme is voluntary. It’s an internal decision for individual service providers to make as to whether they accept an offer of extension of indemnity from DCJ.

3. Why is there are a fee to access the Scheme?

   DCJ is required to make an additional contribution to the TMF to cover the assessed State liability for the Scheme. DCJ will recoup this additional cost by charging a fee to service providers.

4. Why is my organisation’s indemnity fee higher for the extension period?

   The assessed State liability for the Scheme increases every year the Scheme is in operation. To cover the cost of providing cover under the Scheme for a third year, until 31 December 2024, DCJ is required to increase its additional contribution to the TMF (refer to question 3). DCJ will pass on this increased cost to service providers.

5. Why are only OOHC and youth homelessness providers able to access the Scheme?

   The Scheme has been established as a temporary measure in response to the withdrawal of commercial insurers from providing PSA cover for OOHC and youth homelessness services. PSA cover for other service types is still available from commercial insurers.

6. What is ‘claims made and notified’ cover?

   The Scheme is provided on a ‘claims made and notified’ basis.

   This means the indemnity provides cover for PSA claims (relating to incidents which have occurred after 30 June 2017) that are made against the service provider and notified to icare during the indemnity period.

   ‘Claims made and notified’ cover is different from ‘occurrence’ based type cover which provides cover for claims relating to incidents that occur during the period of cover, regardless of when the claim is made.

7. Are claims made under the National Redress Scheme covered?

   Yes – providing the claim is within scope of the indemnity as outlined in Section 4.1 – Scope of the Indemnity of the Program Guidelines.

8. Why does the Scheme only cover claims relating to incidents that have occurred since 30 June 2017?

The Scheme is a temporary measure only, aimed at ensuring current contracted service providers can continue delivering services until a sustainable and longer-term solution is identified. Cover for historical PSA claims is being considered as part of the work DCJ is doing to develop a potential longer-term solution.

Further information about this work is available here.