Businesses in Western Australia (WA) can no longer be indemnified by another party for fines and penalties due to breaching regulations following the state's amendments to workplace health and safety (WHS) legislation.
The amendments are effective from March 31, 2022, in WA and they follow similar changes in New South Wales (NSW; effective June 10, 2020) and Victoria (effective September 22, 2021). The changes apply only to WHS and brings insurance cover into line with other legislation imposing personal liability on directors and holds businesses liable for the fines and penalties awarded.
Insurance is currently available for costs incurred in investigation and defence in WHS cases. However, Gallagher explained that the changes do not impact other fines and penalties that may be covered by statutory liability insurance.
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Like Victoria, WA does not have a “grace period” for prosecutions before the amendments commence. As such, businesses holding insurance cover with terms providing cover for fines and penalties with claims currently on-foot will not be eligible for fines and penalties indemnity.
As a result, Gallagher advised businesses to look carefully at their policy terms when renewing their insurance cover to ensure they do not indemnify fines and penalties for WHS breaches.
“This is important because, under the new amendments, it is an offence to enter into a policy agreement under these terms, with fines of up to $51,000.00 for an individual and $255,000.00 for a body corporate,” the brokerage said. “The Gallagher Professional and Financial Lines specialism can guide larger companies with national branches in regard to compliance with and exposure to these changes in statutory liability.”
