In response to proven breaches of occupational health and safety laws, judges usually apply financial penalties to companies and individuals. These penalties, like all court-ordered punishments are to deter the offenders from re-offending but also to show others the consequences of their actions. But what if an insurance company would pay for that penalty in return for regular premium payments? If the offender does not pay the penalty, deterrence is gone.
On 27 June 2013, a company and its director were fined $A200,000 each in relation to workplace incident that resulted in the gruesome death of one man and a near miss for another but the director had taken out a general insurance policy and the insurance company paid out!!??. A fine of $A200K awarded but the offender may pay no more than $A10K. Continue reading “Insurance over OHS prosecution hits the deterrence effect”