NSW Workplace Health & Safety Law Update | July 2020
On 4 June 2020, NSW Parliament passed the Work Health and Safety Amendment (Review) Bill 2020 (the Amendment Bill) which introduced various changes to WHS laws under the NSW Work Health and Safety Act 2001 (the Act). Changes of potentially significant impact to organisations insurance arrangements are outlined below.
Insurance or indemnity arrangements
Significantly, The Amendment Bill creates a new offence of entering into, providing or taking benefit of insurance or indemnity arrangements with respect to the monetary penalties for offences under the Act. Officers of a body corporate committing the offence may also be liable for the offence. This will apply to any prosecution going forward.
Insurance purporting to cover WHS penalties under the Act has been the subject of debate and controversy. It has been argued these insurance policies undermine the policy objectives of the Act by mitigating or removing the financial consequences for breaches. Under the Amendment Bill changes, the Act now prohibits certain insurance arrangements in relation to WHS penalties. Significant penalties apply for breaches of these sections.
Insurers should note that the Bill does not prohibit the insurer offering, or a person taking, a benefit of an insurance policy for defence or investigation costs for WHS matters. This is an important distinction, as these costs can be significant.
In response to this change, insureds should seek advice with respect to their relevant policies immediately to avoid committing an offence under the new law. Insured’s also need to be vigilant about checking the date of the incident before determining whether indemnity will be granted.