As Australian states and territories implement updates to workplace health and safety (WHS) legislation, authorities are conducting an increased number of investigations into safety incidents in Australian workplaces with more prosecutions being brought and steeper penalties imposed.
Understanding the trends in WHS risk and legislation is critical for business owners, executives and managers, especially those operating in high-risk industries like mining, construction and where workplace health and safety is paramount.
Workplace fatalities and serious injuries remain a major focus for regulators. Although there have been more than 1850 traumatic injury fatalities in Australian workplaces in recent years, this figure represents a steady reduction in workplace fatalities since 2007, and there has been a 30% decrease since 20121.
These updates to legislation have introduced a harmonised framework adopted in all jurisdictions except Victoria which imposes strict requirements and carries significant penalties for individuals and organisations found to be in breach.
Prohibitions against insuring or indemnifying WHS fines have been introduced in Victoria, New South Wales, Western Australia (WA), Queensland2 and the Australian Capital Territory (ACT). There are currently no prohibitions in Tasmania, South Australia or the Northern Territory, but the position is under review.
While businesses can still lodge insurance claims for the legal costs of WHS prosecutions or required investigations, the prohibition on indemnifying penalties underscores the need for businesses to be proactive in adopting preventative risk management protocols and engendering a workplace safety culture.
The WHS landscape is complex and breaches can have significant implications for organisations and individuals. Implementing the right risk management framework includes assessing available insurance cover as a tool for mitigating and transferring risks.
Two forms of insurance cover may apply in WHS actions brought against businesses: directors and officers' (D&O) liability and statutory liability.
Directors and officers' insurance covers individual executives' and senior managers' legal expenses involved in both civil and criminal proceedings brought against them, including breaches of legislation. Insurers require formal notification of actual and potential legal actions and costs and must also provide written consent before the policy can be activated. Notification must be made during the policy period.
While D&O insurance covers individuals, statutory liability insurance is designed to cover both the business or organisation and senior management and employees for allegations of unintentional breaches of key legislation in the course of business activities, that may include WHS laws and regulations.
Gallagher specialises in assisting organisations and individuals in navigating WHS risks and insurance implications. Our specialist brokers are available to help you obtain optimal outcomes, working in partnership with your team to support the implementation of effective and robust WHS risk management as well as tailored insurance programs that protect you now and into the future.
1"Key work health and safety statistics Australia 2022, SafeWork Australia, 2022," Safe Work Australia, updated 17 Jan 2023.
2"Work Health and Safety and Other Legislation Amendment Act 2024," Workplace Health and Safety Queensland, 29 Nov 2024.
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