Amendments to WHS legislation- Statutory Liability
What all Australian employers need to be aware of
As an employer you may have heard about some of the changes recently made to Work Health and Safety (WHS) legislation in various states across Australia. The main aim of these amendments is to force employers to take WHS matters more seriously by providing safer working conditions for their staff.
What you may not know about these changes, is that in several states, businesses can no longer enter into a contract of insurance to cover them for any fines they receive for breaching WHS laws.
“It is a timely reminder to a person conducting a business or undertaking (PCBU) that WHS is a serious issue, and the law places a primary duty of care on the business, as well as its directors and officers. The time to worry about WHS isn’t when there is an accident or the resulting regulatory action, it is right now. Purchasing a statutory liability policy should be the final piece of a large risk management puzzle that includes proper management systems, documented policies and procedures, recorded training and enforcement to ensure the safety of workers and other people that come into contact with the business.” Stated Ben Johnston Bradford from Specialist Underwriting Agencies in their recent NSW paper.
Due to the legislation below, it’s now illegal for an insurer to indemnify an insured for a fine or penalty in relation to a contravention of a WHS obligation in NSW, Victoria or Western Australia:
NSW – Work Health and Safety Amendment (Review) Act 2020
Victoria – Occupational Health and Safety and Other Legislation Amendment Act 2021
Western Australia – Work Health and Safety Act 2020
Furthermore, employers in Victoria should be made aware of WHS legislation that was introduced in March 2022 – Workplace Safety Legislation and Other Matters Amendment Act 2022
Then why do you still need Statutory Liability Insurance?
Knowing they no longer have protection against fines or penalties arising from WHS contraventions , it’s no doubt that employers are concerned. Although, in what may come as a relief to many policy holders, insurance companies can still offer cover for other expenses associated with WHS contraventions. That’s right, while business owners need to make sure they don’t get fined in the first place, they can still have protection against WHS investigation, legal, enforceable undertaking and prosecution costs..
Berkley Insurance Australia proudly endorses the services offered by our coverholder, Specialist Underwriting Agencies (SUA). Their Statutory Liability product (underwritten by BIA) can provide effective cover for Australian businesses against the other costs and expenses associated with a WHS investigation or prosecution .
When SUA recently analysed the history of their Statutory Liability Portfolio in their WA paper, they made a surprising discovery. The policy was first offered in 1998, and over the intervening years, only approximately 15% of the claims they covered were for fines. Therefore, the overwhelming majority of SUA’s claims were in relation to prosecution, legal and enforceable undertaking costs.
So what’s the take home message then? Australian business owners should still consider getting Statutory Liability cover to protect their businesses against the other substantial costs involved in responding to a WHS investigation or prosecution, even if it can no longer cover them for WHS fines or penalties in NSW, Victoria or Western Australia.
Paying for investigation and legal fees can have a financially damaging impact on an uninsured business. Therefore, it’s best to seek cover with a specialist underwriting service like SUA, who understand Statutory Liability insurance and can get your business protected against these risks.
Berkley Insurance Company ABN 53 126 559 706 t/as Berkley Insurance Australia (BIA) is an APRA authorised general insurer. Specialist Underwriting Agencies Pty Ltd ABN 18 010 862 745 AFSL 231104 has a binding authority from BIA to issue certain insurance on its behalf. Information provided is general only and has been prepared without taking into account any person’s particular objectives, financial situation or needs. Insurance is subject to terms, conditions, limits, and exclusions. Underwriting criteria applies. When making a decision to buy or continue to hold a financial product, you should review the relevant Policy Wording.