When Maria Boland published her WHS National Review in 2018, the big item was banning insurance for penalties. NSW will be the first to enact her recommendation in Australia.
The evidence is overwhelming that insurance reduces safety focus and performance. New Zealand, when it adopted the Model WHS legislation of Australia, amended it to prevent insurance and made it an offence to insure. But why nothing in Australia? The answer is that Australia has always been captive to its insurers. The HIH collapse of 2001 led to changes in premiums and Government interventions to shore up the industry. It appears nothing has changed.
There can be no sound policy to insure for safety breaches. Magistrate Lieschke, in Hillman v Ferro Con (in Liq)[2013], rightly imposed the courts view that utilising insurance fails to accept the consequences of wrongdoing, and imposed a higher fine. At last NSW have stepped up, with the recent WHS Amendment Bill(2019) passing the lower house and is on its way to becoming law. It prohibits insurance for penalties, imposing fines of up to $250,000 on the PCBU, $50,000 on individuals and up to $125,000 on Officers who are knowingly involved.
Hopefully other States and Territories will follow.
