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Workers Compensation in NSW


Article on Workers Compensation in NSW by mark

Mark Adams mark@allrisk.com.au
25-09-2017

NSW workers comp

Q: I got told by someone else I don’t need it
A:  
  • We are the only Owner-Builder insurance specialists in Australia quoting on Workers Comp for owner-builders. We’re also the only ones who have to… because we’re exclusively recommended by almost every Owner-Builder training provider in Australia now.
  • So we have an obligation, if we expect to continue to be so widely recommended, to advise our clients on ALL of the risks, of which Workers Compensation absolutely is one.
Q: Why do I need it then?
A:  
  • The common mistake is assuming that you can just check that all your contractors have their own Workers Comp cover.
But this does not work!
Why?
-       The only contractors who can insure themselves for workers comp are ‘Pty Ltd’ companies.
-       ‘Sole Traders’ can insure their workers, but they cannot cover themselves.
(for confirmation directly from iCare on this point refer to https://www.icare.nsw.gov.au/employers/your-insurance-obligations/who-needs-workers-insurance under “Sole traders and proprietorships” heading).
  • Because a sole trader cannot cover themselves for Workers Comp, they can and do instead claim against the Builder they are working for.

Q: Why does my policy say I have 1 worker and $7500 wages?
A:  
  • Sole Traders can’t cover themselves for Workers Compensation so they can claim against the Builder they’re working for, but their ability to lodge a claim doesn’t guarantee the claim will be successful.
  • Either way, the policy covers your exposure, whether it’s the legal costs defending a claim, or the pay-out awarded when the claims are successful.
  • A successful claim will occur when, at the time of assessing the claim, the contractor is defined as a ‘deemed worker’.
  • Your only exposure is to deemed workers, but you cannot know how many you’ll have (or what you’ll pay them) until after a claim has occurred and you find out if they are to be granted the status of ‘deemed worker’ or not.
  • The policy placed on your behalf is at the minimum levels allowed (ie over $7500 wage estimate), but this doesn’t limit your cover in any way. It is only an estimate, and you’ll have full cover against any claims from contractors.

Q: Why does my policy end on the 30th/31st? Shouldn’t it be a full 12 months?
A:  
  • The Government in NSW decided recently to force all Workers Compensation policies to expire at just one time each month (the end of the month). It’s their ruling, and we don’t get a say in the matter. All new policies have to have an expiry date that is the end of the month prior.
  • If you renew the policy for a further year it will be a full 12 months though.

Q: Why have I been sent two separate invoices for the Workers Comp?
A:  
  • In NSW iCare have taken over the Workers Comp scheme, but they are only currently handling policy placement and renewal.
  • Claims are still being handled by the authorised insurers like GIO.
  • We don’t know if this is their final solution, or if it will change again within the next year.
  • For the moment, you’ll have received an invoice from iCare, and also one from us, acting as your broker for claims handling and advice, and in conjunction with GIO.
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