Client blames broker for SIRA non-compliance

State Insurance Regulation Authority’s (SIRA) investigators have contacted an insurance broker to reiterate the obligation of providing legally sound advice after the broker allegedly misled a business owner in Hunter.

The hospitality provider ran afoul of the law when she realised her public liability insurance did not cover her workers compensation liabilities. The business had been uninsured for a substantial period of time in a high-risk industry which recorded more than 18,000 injuries, more than 250 permanent disabilities and eight deaths in the past three years.

She rang SIRA and explained her predicament, allegedly having been misled by the broker she used and trusted when she set up her business five years prior.

Sarina Tranter, Director of SIRA Compliance, Enforcement and Investigation, said SIRA dealt seriously with uninsured employers who avoided premiums to obtain a commercial advantage over other businesses.

“NSW has a safety net for workers in the event they are injured and their employer is uninsured,” Tranter said.

“The uninsured worker can make a claim through icare’s uninsured liability section. And while normal benefits apply to these claims, there are heavy penalties for employers. In addition the employer is liable for the cost of the claim.”

The hospitality provider faced the prospect of paying double premiums for up to five years, a fine of up to $55,000 and/or imprisonment for up to six months. In determining appropriate enforcement action, SIRA’s investigators considered mitigating factors including the employer’s self-disclosure, cooperation and remorse, and ordered her to pay a more lenient three-year ‘avoided premium penalty’ of $18,000.

Workers compensation is required by law under section 155 of the Workers Compensation Act 1987. SIRA’s Compliance, Enforcement and Investigations team identifies uninsured NSW employers, which often becomes apparent when an employee is injured. The unit also leads projects targeting high risk industries to make sure employers are aware of their obligations under the Act so they can avoid penalties.