Insurers Pick Up Cost of Non-Compliance

GavelTaking out insurance policies to evade criminal penalties could be a thing of the past if SafeWork Australia has its way.

Under a proposal being considered by SafeWork Australia, directors of companies could be prohibited from claiming an indemnity if charged with criminal penalties under new WHS laws.

This is after a noticeable upsurge in the number of companies taking out policies that include cover for criminal conduct.

In an update to our story on employers buying their way out of WHS fines we see that SafeWork has now shown more interest in closing a loophole that allows companies and their officers to avoid personal financial pain by selling off the risk to an insurer.

Under WHS legislation companies face up to $3m in penalties and individuals up to $600,000 if convicted of the serious breaches. A system where companies and officers can sell off that risk to someone else effectively dilutes the power of having monetary penalties at all.

As few officers will ever go to jail in lieu of paying fines, the impact of penalties as a deterrent to poor compliance is effectively diminished.

It will be interesting to see if the proposal by SafeWork Australia gets up.


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Safety Concepts is an online resource providing up to date insights and covering issues in the field of Workplace Safety.

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