Authorities across Australia are ramping up workplace health and safety (WHS) investigations, with businesses facing a rise in prosecutions and heavier penalties as states and territories continue updating WHS laws.
According to Gallagher, workplace fatalities and serious injuries remain key concerns for regulators. Over 1,850 traumatic injury deaths have been recorded in Australian workplaces in recent years, but the overall fatality rate has declined by 30% since 2012.
Most states and territories, except Victoria, have adopted a harmonised WHS framework that imposes significant penalties for breaches. Several jurisdictions – including Victoria, New South Wales, Western Australia, Queensland, and the Australian Capital Territory – have also prohibited businesses from insuring or indemnifying WHS fines.
Gallagher noted that businesses facing WHS-related legal action typically rely on two forms of insurance: directors and officers’ (D&O) liability and statutory liability. D&O insurance covers legal expenses for executives and senior managers in both civil and criminal cases, including breaches of legislation. Insurers require formal notification of potential legal actions and must approve claims before the policy is activated.
On the other hand, statutory liability insurance can provide coverage for businesses, senior management, and employees in cases of unintentional breaches of WHS laws.
A recent prosecution under Western Australia’s updated WHS laws involved a haulage and crushing contractor and a mine operator charged with failing to ensure worker safety. Gallagher explained the case arose after a mechanic injured his arm while clearing an obstruction near an unguarded roller of a mobile stacker. Both businesses face a maximum fine of $3.5 million but may claim insurance for their defence costs.
In another case, a mining company was prosecuted for not complying with a WorkSafe WA inspector’s request for documents related to multiple sexual harassment allegations at its sites. The company avoided prosecution by agreeing to an enforceable undertaking, with its legal expenses covered by liability insurance.