Construction Industry Insurance Coverage Under Scrutiny

WorkCover WA has announced an Employer Compliance Campaign focusing on the residential construction industry.

Inspectors from WorkCover plan to perform compliance checks on businesses in this industry primarily to ensure that workers’ compensation insurance policies are up-to-date. There is nothing new about this requirement, as workers’ compensation (employers’ indemnity) insurance has been compulsory in Western Australia for a very long time. In addition, the level of non-compliance appears to be low.

The consequences of non-compliance are of course very serious for both employer and potentially for an injured worker. The employer is liable for fines of $5,000 per worker plus an amount equal to the premium avoided, backdated five years. The employer is also directly liable for the cost of any claims.

Recently we have heard of several high-profile business failures associated with the construction industry and stories of numerous sub contractors (and others) that are seriously out of pocket. Although it is not clearly evident that this compliance campaign by WorkCover is or has been influenced by these relatively recent problems in the construction industry, the fact that those problems have occurred makes the campaign timely.

WorkCover has always been prepared to deal with cases of non-compliance, investigate and seek to impose penalties where appropriate. Not so often however has WorkCover taken active steps to investigate the industry.

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All employers, and particularly those within the class of business that will come under the purview of this investigation should take care to ensure that their work practices and insurances are appropriate and up-to-date.

Please contact partner Vidal Hockless on 08 9321 3755 if you have any questions or visit the WorkCover WA website for more information.

The information published in this paper is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.