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, three States (i.e. New South Wales, Western Australia and Victoria) have introduced an express ban on this practice. In those States, it is now an offence to insure or indemnify a person for their liability to pay any work health and safety fines.
Can you get insurance cover for WHS fines and penalties?
One of the recommendations in Marie Boland’s Review of the model Work Health and Safety laws was that insurance for WHS fines be prohibited.
Amend the model WHS Act to make it an offence to:
- enter into a contract of insurance or other arrangement under which the person or another person is covered for liability for a monetary penalty under the model WHS Act
- provide insurance or a grant of indemnity for liability for a monetary penalty under the model WHS Act, and
- take the benefit of such insurance or such an indemnity. to ensure these fines are effective as a deterrence against breaches of these laws.
Since the review, some states have introduced an express ban on the practice of insuring or indemnifying against a WHS fine or penalty.
A summary of the laws and regulations across Australian states and territories is outlined below (current at October 2022).
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
As of 10 June 2020, Section 272A of the Work Health and Safety Act 2011 (NSW) makes it 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
As of 21 September 2022, Section 148B of the Occupational Health and Safety Act 2004 (VIC) makes it 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
As of 31 March 2022, Section 272A of the Work Health and Safety Act 2020 (WA) makes it 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
| State/Territory | Can insurers insure or indemnify against a WHS fine or penalties? | When did the prohibition come into effect? |
|---|---|---|
| Western Australia |
No. Section 272A of the Work Health and Safety Act 2020 (WA) makes it an offence to:
Individual: $51,000 Body corporate: $255,000 |
31 March 2022 |
| New South Wales |
No. Section 272A of the Work Health and Safety Act 2011 (NSW) makes it an offence to:
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) |
10 June 2020 |
| Victoria |
No. Section 148B of the Occupational Health and Safety Act 2004 (VIC) makes it an offence to:
Individual: $55,476 (300 penalty units) Body Corporate: $277,380 (1,500 penalty units) |
21 September 2022 |
|
Queensland Tasmania South Australia Northern Territory Australian Capital Territory |
Yes. There are currently no laws or regulations in these jurisdictions that prohibit insurers from insuring against or indemnifying for liability to pay a WHS fine or penalty. |
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