On 4 June 2020, the NSW Minister for Better Regulation and Innovation, Kevin Anderson announced proposed amendments to the Work Health and Safety Amendment (Review) Bill 2020 that are aimed to make it easier to prosecute certain offences which can lead to prison time and increase fines for breaches of the Work Health and Safety Act 2011 (the WHS Act).
The National Insurance Brokers Association (NIBA) Legal Adviser, Mark Radford has prepared a note containing an overview of the bill.
Of major relevance to the insurance industry, is that the bill will make any form of insurance to cover penalties for work health and safety offences under the WHS Act illegal and make it an offence for a person:
- without reasonable excuse, to enter into a contract of insurance or other arrangement under which the person or another person is covered for liability for a monetary penalty under the WHS Act or
- to provide insurance or grant indemnity for liability for a monetary penalty under the WHS Act; or
- to take the benefit of: a contract of insurance or other arrangement, under which the person or another person is covered for liability for a monetary penalty under the WHS Act, or a grant of indemnity for liability for a monetary penalty under the WHS Act
As at 4 June 2020, the bill has been passed by both houses and is awaiting assent. The provisions will have effect from the date of assent.
The prohibition is broadly drafted and would appear to at least catch insurance, corporate indemnities and discretionary arrangements. Insurers will need to amend any new policies to be issued post commencement to remove any such prohibited cover.
Existing pre-assent policies do not need to be amended but it appears that an insurer is prohibited by law from paying under an existing policy for a post assent incident. Premium adjustments may need to be considered along with communications to insureds.
Insurance brokers will need to ensure they do not arrange such insurance or other arrangements for their clients on an ongoing basis from assent or arrange for any payments in breach of the Act under existing arrangements. Communication to clients may need to be considered
Employers will need to ensure they do not have such insurance or other arrangements and avoid breaches in relation to existing arrangements for post assent incidents.
You can access Radford’s note on the NIBA website here.