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Worker's compensation insurance is a must-have for any business that involves workers, even on a casual or voluntary basis. Employers are obliged to have insurance cover for workers who are injured or become ill as a result of their work activities, but understanding your obligations as a business can be challenging, with Commonwealth, federal and state/territory laws to consider.
The terms of the cover are based on the Workers' Compensation Act 1987 and relate to the legal requirement for employers to maintain a safe workplace and protect employees from injury, whether it's a physical or mental health injury.
This means that if a worker sustains harm while at work or engaging in required duties they're entitled to first aid, financial recompense for time off, injuries and expenses, and a rehabilitation plan for their return to the workplace.
This generally applies even if the worker failed to correctly observe business protocols and procedures, unless their behaviour amounted to extreme misconduct.
What does workers' compensation insurance cover ?
Workers compensation typically provides cover for insured incidents including:
The intention of workers' compensation insurance is to support a worker in avoiding suffering financial hardship as a result of an injury or illness arising from their employment activities or conditions. It pays workers who are injured at work for lost wages for a specified period if they're unfit to work, and can also pay for doctors' and medical costs, and compensation for permanent impairment or death.
Workers' compensation insurance protects employees including
Sole traders are not eligible for workers' compensation insurance to protect themselves and need to organise their own personal illness, death or disability insurance.
The same situation may apply if you're a contractor. For businesses employing contractors, obligations vary according to your state or territory so it's best to check with the relevant authority.
Workers' compensation is highly regulated in Australia and a business arranges this type of cover based on location. For some states/territories there is a mandatory single workers' compensation provider, and in other locations there is flexibility for businesses to choose the workers compensation insurance provider.
Workers' compensation insurance providers around Australia
Locations with mandatory WC providers
Locations with choice of WC providers
Business owners may familiarise themselves with the regulations and requirements involved with workers' compensation in the location(s) where they operate by checking the Australian government website.
If your business needs help with workers' compensation insurance Gallagher can advise and provide access to cover in the locations with choice of insurer. Also your broker, working with our Workplace Risk team, can help you with the right risk management and insurance solutions to help keep your employees protected, and advise on obtaining the right workers' compensation cover for your business.
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient's industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers' control.
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