Changes to WHS Act passed in NSW
WH&S Fines and Penalties in NSW are now un-insurable.
On 10 June 2020, the NSW Government passed amendments to the Work Health and Safety Act 2011 (NSW).
Following the addition of the new sections 272A and 272B, it is now an offence to benefit from insurance or indemnity arrangements for a monetary penalty for a WHS offence.
Do you still need Statutory Liability Insurance?
The above changes have raised questions about the value of Statutory Liability Insurance for some businesses.
SUA has recently undertaken an analysis of its statutory liability insurance portfolio since they commenced providing coverage in 1998.
It was found that on average only 15% of all claims paid were for penalties, the remaining being either legal costs, enforceable undertaking costs or prosecution costs - none of which are affected by the amended WHS Act in NSW.
For this reason, Statutory Liability Insurance remains very relevant, provided the right policy is in place. Choosing the right policy is of utmost importance.
Coverage Considerations
Statutory Liability coverage can be provided on a stand-alone basis or under a Management Liability insurance policy.
In some policies, depending on the insurer, coverage may also be available for an Enforceable Undertaking (EU).
A proper risk analysis of the sector your business operates in should be conducted before selecting a Statutory Liability policy. This ensures you can select a policy with appropriate compliance and coverage that is unique to your business needs.
Broad Form Coverage
Some Statutory Liability policies will only cover certain Acts of Parliament, others have Broad Form coverage.
Outside of the WHS Acts, this can include:
- Environment Protection Act
- Spam Act
- Privacy Act
- Planning and Building Acts
- Heavy Vehicle National Law (Chain of Responsibility)
- Corporations Act
- Fair Work Act
Incident Response
Some Statutory Liability coverage provides immediate legal assistance from the time of an incident that could potentially lead to an investigation of prosecution.
Other policies will only respond once an investigation or prosecution is commenced. The majority of Management Liability policies will only respond once an investigation or prosecution is commenced.
Enforceable Undertakings
Some Statutory Liability policies provide cover for Enforceable Undertakings (EU's), however, not all. The majority of Management Liability policies will not provide coverage for EU's.
How Coverforce can help
At Coverforce, we understand the risks and exposures faced by businesses every day. Our expert insurance brokers will work with you to provide personalised risk advice on the right Statutory Liability policy to protect you and your business.
For further assistance, you can contact Nathan Brown on (02) 9376 7853 or email nathan_brown@coverforce.com.au.
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.
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