Insurance backstop for employers

By KEVIN TAYLOR

Insuring against fines arising from health and safety convictions will become illegal next month, but reparation orders can still be covered.

The Health and Safety in Employment Amendment Act comes into force on May 5.

One of its many changes means employers can no longer insure against fines imposed in a successful Occupational Safety and Health Service prosecution.

But the Employers and Manufacturers Association (northern) says it has discovered reparation awards could still be insured against.

OSH confirmed the association's view.

Paul Jarvie, association manager of occupational health and safety, said the new Sentencing Act last year gave district court judges discretion to award reparation - a payment to an employee which is not considered compensation but is for consequential or emotional loss suffered.

"Since then a small number of cases have awarded minimal fines but with amounts of reparation up to four times larger than the fine."

Employers wanting to be covered for reparation must ensure their insurance policies clearly state reparation is covered, and that the word "fine" is deleted.

Jarvie said the courts awarded about 30 per cent of the present law's maximum penalty of $50,000, so it was reasonable to assume with maximum penalties under the act rising to $250,000 from May that breaches of the new law would carry proportionately higher awards.

"But employers should remember a single event can attract several prosecutions." Employers were still allowed to insure against the costs of defending a prosecution.