Western Australia is the most recent state where amendments to workplace health and safety legislation have removed the ability for businesses to be indemnified by another party for fines and penalties as a result of breaches of regulations.

These changes will take immediate effect from 31 March in WA and follow similar changes seen in New South Wales (10 June 2020) and Victoria (22 September 2021). It is expected, ultimately, all Australian jurisdictions will be aligned.

One reasoning behind this may be fines, which are covered by an insurance policy, negate the intention of the penalty in being a deterrent.

The amendment applies only to workplace health and safety and brings insurance cover into line with other legislation that imposes personal liability on directors and holds businesses liable for the fines and penalties awarded.

Insurance is currently s available for costs incurred in investigation and defence in WHS cases, and these changes do not impact other fines and penalties which may be covered by statutory liability insurance.

Effective dates for changes to insurance cover in regard to WHS matters

While NSW benefited from a 'grace period' for prosecutions prior to 1 June 2020, these amendments in WA, like Vic, do not have this 'grace period'. 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.

These amendments may result in defendants needing to alter their strategy before the court, such as pleading not guilty or entering into enforceable undertakings instead of fine with a guilty plea.

The need to check business insurance terms

Businesses renewing their insurance cover should look carefully at their policy terms to make sure they don't 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 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.

Get expert workplace health and safety advice

Find out more by talking to one of the experts on the Gallagher Workplace Risk team. The team's services encompass safety mentoring and training through to health and wellness programs, hazard and risk profiling, and incident management and investigation.

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