Workers Compensation Recovery Claims in Australia

Workers Compensation Recovery is a primary source of concern under an Australian General Liability Policy. In Australia, Workers Compensation Recovery claims are governed by both federal and state legislation. Each state and territory have their own specific laws and regulatory bodies overseeing workers’ compensation. One of the main challenges is the variability in legislation and processes across states and territories, leading to inconsistencies in claim outcomes.

In recent years, the trend of corporate structures in Australia setting up internal labour hire arrangements has been on the rise. While internal labour hire arrangements can offer companies flexibility and cost savings in relation to their workforce, the principal’s General Liability policy remains exposed to Workers Compensation Recovery claims.

Workers Compensation Recovery claims involve a contractor, subcontractor or labour hire employee sustaining injury at a worksite/premises. A common scenario involves an injured worker lodging a claim under their employer’s Workers Compensation policy. The Workers Compensation insurer will investigate the circumstances, and if the injury is found to result from the principal’s failure to uphold their duty of care, the insurer may pursue recovery of costs through the principal’s General Liability policy.

• Work related injury fatalities, permanent disability
• Traumatic joint/ligament and muscle/tendon injury
• Musculoskeletal and connective tissue disease
• Wounds, lacerations, amputations and internal organ damage
• Mental health conditions
• Fractures

• Reduce the overall number of contractors, sub-contractors, labour hire workers where applicable
• Minimise the use of contractors, sub-contractors, labour hire working in high-risk industries or performing high-risk activities (construction, factories, warehousing, forklifts, etc.)
• Clear definitions of who is considered a worker (Primary, Extended, Contractor/Sub-contractor, Labour Hire etc.)
• Conduct robust Work Health & Safety Inductions including:
  • Onboarding
  • Permit to Work Management
  • Safe Operating Procedures (SOPs)
  • Licenses & Training