A federal parliamentary inquiry into insurance challenges facing small businesses, charities and community groups will begin public hearings tomorrow as lawyers argue against “cutting compensation rights”.

The Australian Lawyers Alliance says thousands of victims of negligence risk losing the right to sue for compensation if parliament “bows to pressure from the insurance industry to restrict claims”.

“Insurers are advocating for significant changes to civil liability laws, which will mean that people who have been injured will not be able to receive the support they need to rebuild their lives,” national president Ian Murray said today. “However, there is no data to support these proposals.”

The inquiry, which has published 87 submissions, is holding the hearings at the Sydney Masonic Centre, with witnesses appearing in person and via teleconference.

Tomorrow’s hearing begins with the Australasian Music Publishers’ Association, followed by Finity, motoring advocate MTA Group, the Financial Advice Association of Australia, and the Australian Tattooists Guild.

The final session includes Consult Australia, the Australian Chamber of Commerce and Industry, and the Australian Prudential Regulation Authority.

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On Thursday, proceedings begin with QBE, followed by the Business Council of Co-operatives and Mutuals, IAG, the Outdoor Council of Australia and Scouts Australia.

After lunch, the inquiry will hear from the Insurance Council of Australia, National Insurance Brokers Association, Australian Lawyers Alliance and the NSW Small Business Commissioner.

ICA has made submissions encompassing industrial special risks and business interruption, workers’ compensation, cyber, professional indemnity and public liability cover.

Recommendations include a national review of civil liability laws, government procurement changes so small businesses are not required to take out excessive cover, and workers’ compensation reforms.

It says “expansive judicial decisions, a more litigious society, an active plaintiff law firm and third-party litigation funding environment, and increasing claims costs” have emerged in the 25 years since the last significant civil liability settings review.

“Well-targeted reform can bring costs down while still making sure injured people get fair compensation, and that’s the outcome we want to work with governments to deliver,” CEO Andrew Hall said in March.

The lawyers’ alliance says earlier reforms created a patchwork of laws that weakened protections for injured people, with little evidence they delivered long-term premium reductions.

“Many Australians are already excluded from compensation despite suffering real harm,” Mr Murray said. “Further restrictions risk leaving more people without the support they need or pushing the cost onto government-funded schemes.”