Are you concerned you’re paying too much for Workers Compensation Insurance?
What is it and what affects your Workers Compensation Premium?
In the event of a work-related accident or illness, state and territory health and safety laws require injured workers have access to first aid, workers’ compensation and a return to work rehabilitation program. This follows the key responsibilities of every employer to:
maintain a safe workplace
maintain current workers’ compensation insurance, and
protect themselves and their workers from financial hardship as a result of a workplace injury.
In many cases, the engagement of a contractor to perform duties for a business may also result in the business having workers’ compensation liability under relevant state or territory health and safety legislation.
This article provides information related to the provision of workers’ compensation as one of the key insurance measures businesses need to have to protect their viability and the safety and welfare of the people working for them. We include some reporting of workers compensation data collected in recent years.
What is workers’ compensation?
Workers Compensation is a form of insurance funded by employers to provide wage replacement and payment for medical benefits when a worker is injured during their employment.
In Australia, there is a legal system set up by each state or federal government which is designed to offer collective liability across all industries in that state or territory to ensure fairness and to attempt to limit employers becoming insolvent owing to high damage awards in law suits.
Who provides the insurance for workers compensation?
Each state and territory approach this differently, with some systems being exclusively run by the government to others allowing for competitive insurance broking and coverage through private insurance companies and with some allowing companies to self-insure.
Regardless of who the insurance provider is, each state and territory has legislation and detailed regulations on the management of workplace injuries with the insurer providing the financial support for the system of providing wage replacement and payment for medical benefits for an injured worker
What affects my workers compensation premium?
The most appropriate workers’ compensation insurance coverage needs to be chosen to suit your business. Factors which influence the ultimate cost of the premium include:
the type of business or enterprise
the structure of the business or enterprise
the size of the business or enterprise (most commonly measured in the total remuneration cost)
the industry the business or enterprise operates within.
When securing or renewing workers compensation insurance, a further factor related to the claims experience (that is the nature and costs of claims in the past for that business or enterprise) will also impact the premium cost. For example, poor claims experience (an increase or high relative in the number of injuries and workers compensation claims) will most likely result in an increased premium cost.
The AB Phillips Workers Compensation Premium Review is conducted nationally and analyses current and past premium calculations of the business to ensure the correct premium amounts are being paid and to uncover possible overpayments. The data required to facilitate this review is accessed directly from your WorkSafe Agent.
We will investigate the three main areas that make up premium calculation, these being:
Workplace Classification
Certified/Deemed Remuneration
Claims Costs
Where applicable, AB Phillips will seek a refund for overpaid premiums dating back up to 4 years, and/or a reduction in the current premium amount.
Please note that the above information is provided as comment and should not be relied on as a substitute for detailed professional advice from AB Phillips Group or professional legal or financial advice on any particular matter. Where you would like additional information and support about the content in this document please contact AB Phillips Group.