epar has been delivering EHS awareness workshops to Boards around the country and the question of insurance is always raised. This post provides an update on the ability to take out insurance for workplace safety fines or penalties.

In the past, insurers in all States and Territories were able to cover any fines which businesses were liable to pay when they breached work health and safety laws. The Boland Review which was finalised in 2019 recommended that there be a prohibition on this practice to ensure these fines are effective as a deterrence against breaches of these laws.

Since the review, NSW was the first to ban the practice. Victoria and Western Australia have now followed NSW’s lead and have introduced an express ban on this practice. In those States, the legislation expressly prohibits individuals and businesses from entering into a contract that insures or indemnifies it against paying monetary penalties under workplace safety laws.  It is expected that other jurisdictions will also implement similar bans.

A summary of the laws and regulations across Australian states and territories is outlined below

Australian Capital Territory

There are currently no laws or regulations that prohibit insurers from insuring against or indemnifying for liability to pay a WHS fine or penalty.

Northern Territory

There are currently no laws or regulations that prohibit insurers from insuring against or indemnifying for liability to pay a WHS fine or penalty.

New South Wales

It is an offence to:

  • enter into an insurance contract that covers one’s liability to pay a WHS fine without a reasonable excuse;
  • indemnify a person for their liability to pay a WHS fine; or
  • benefit from an insurance contract or indemnity that covers one’s liability to pay a WHS fine.

Penalties for breaching:

  • Individual: For breach of a: $27,500 (250 penalty units). For breach of b or c: $55,000 (500 penalty units)
  • Body Corporate: For breach of a: $137,500 (1,250 penalty units. For breach of b or c: $275,000 (2,500 penalty units)

Queensland

There are currently no laws or regulations that prohibit insurers from insuring against or indemnifying for liability to pay a WHS fine or penalty.

South Australia

There are currently no laws or regulations that prohibit insurers from insuring against or indemnifying for liability to pay a WHS fine or penalty.

Tasmania

There are currently no laws or regulations that prohibit insurers from insuring against or indemnifying for liability to pay a WHS fine or penalty.

Victoria

It is an offence to:

  • enter into or be a party to a contract or arrangement that purports to indemnify a person’s liability to pay a WHS fine without a reasonable excuse;
  • benefit from a contract or arrangement that purports to indemnify one’s liability to pay a WHS fine; or
  • provide a benefit to a person that purports to insure or indemnify that person for their liability to pay a WHS fine.

Penalties for breaching:

  • Individual: $55,476 (300 penalty units)
  • Body Corporate: $277,380 (1,500 penalty units)

Western Australia

It is an offence to:

  • enter into an insurance policy that purports to indemnify a person for their liability to pay a WHS fine;
  • indemnify a person for their liability to pay a WHS fine;
  • be indemnified by another person for one’s liability to pay a WHS fine; or
  • pay to or receive from another person an indemnity for a WHS fine.

Penalties for breaching:

  • Individual: $51,000
  • Body corporate: $255,000

Your best insurance is to ensure your epar system is current and implemented and that you are addressing compliance-critical areas that we have identified as – SDS’s; Equipment training; Hazard Communication; Risk Registers; Incident Management; SWP’s and Inductions.