Liability insurance products get some serious criticism

In 2017 the Queensland Government was advised to prohibit business insurance products that cover the costs associated with financial penalties that may occur after a successful prosecution of a breach of work health and safety (WHS) laws. This recommendation (page 47) was one of only two that were not accepted by the government and which were “referred to the WHS Board” for further consideration (footnote page 3).

On 17 October 2018 the Senate Education and Employment Committee’s report into industrial deaths similarly recommended the Commonwealth, State and Territory governments:

“amend the model WHS laws to make it unlawful to insure against a fine, investigation costs or defence costs where they apply to an alleged breach of WHS legislation;” (Recommendation 21, page xi)

Given the shellacking being handed out to insurance companies in response to revelations uncovered by the Royal Commission into the banking, finance and insurance sectors, it will be difficult for insurers to argue to continue selling policies that weaken the deterrence expected from penalties their clients may receive after one of their workers has died at work.

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