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owe a duty of care to those persons
mentioned above by reason of your
control of the land or work process
which contributed to the injury. An
‘occupier’, as you are termed, has a
duty to reduce as far as is reasonably
practicable the risk of injury to persons
on premises over which they have
supervision or control. Customers
falling in supermarkets, subbies on
worksites (including employees of
another company on your premises) are
such examples. The common theme
being that you have control of the state
of the land/shop, control of workflow as
on-site manager or control of persons
otherwise within your management.
Public liability insurance is a private
insurance arrangement, private to you
and your insurer. You are able to negotiate
the terms and exclusions of your cover,
and likewise the cost of your premium.
This is a vital part of what makes public
liability insurance important – you
may negotiate cover which suits your
individual business operations, exposures
or financial constraints.
Most common contracts for trades
work will require a sub-contractor to
either in part or in full, contractually
indemnify the principal (head
contractor) and require the subbie to
take out insurance that covers both
parties (either as a named insured or by
noting their interest).
As the subbie in this situation, a
failure to take out the necessary
insurance is not only a breach of your
contractual obligation (to take out
insurance), it leaves you uninsured for
your liability to the injured party and to
your principal. With the average costs
of a legal action for compensation being
measured in the hundreds of thousands
of dollars, not to mention the associated
legal fees, your business or personal
assets are at great risk.
Public liability insurance also covers
recovery claims by WorkSafe or another
Insurer. In the circumstances discussed
at the start of this article, WorkSafe will
pay as compensation weekly payments
and medical expenses to injured
employees. If the injury was caused
or contributed to by another entity,
the
Workplace Injury Rehabilitation
and Compensation Act 2013
enables
WorkSafe to recover these amounts
from them. WorkSafe, while relaxed in
approach to premium matters, is highly
engaged in pursuing recovery from
these non-employer third parties. Public
liability insurers are wearing the brunt of
this enthusiasm, which is reflected in the
higher than usual excesses applicable
for such claims – often defined as
worker to worker claims in the public
liability policy. In general, these range
between $5,000 and $25,000.
When discussing your requirements
with a broker, ensure you understand
your contractual obligations. Extension
of insurance coverage to your principal
is often overlooked or coverage not
sufficient. Note whether you are
obligated to contractually indemnify
your principal and whether your policy
covers such contractually-assumed
liability. Further, whether the principal
is required to be a named insured,
named as an interested party or simply
noted. Each has a different legal effect
which could leave the principal without
recourse to your policy of insurance,
requiring them to call upon the
contractual indemnity. The end result
being you are liable for both your and
your principal’s liability.
The enforcement division of WorkSafe
continue to flex its muscle. Most
recently, WorkSafe have targeted
industry specific enforcement such
as working at heights, working in
confined spaces or compliance with
return to work obligations. A search of
WorkSafe’s website lists its prosecution
outcomes. Liability policies, similar to
the statutory workcover policy, do not
often provide cover for prosecutions.
There is very limited access to insurance
for such liability given its quasi-criminal
nature. Same can be said for WorkSafe
prosecutions bought by the Return to
Work Inspectorate. Awards by Courts
from prosecutions range from $30,000
to $1 million. Your broker would be best
placed to source insurance, if available,
to cover this liability.
Given the not insignificant sums of
money that arise in personal injury
matters, it is imperative businesses
are insured. For direct employees and
in circumstances where a subbie is
a deemed employee, your WorkSafe
policy of insurance will respond. Again,
WorkCover insurance is mandatory under
the
Workplace Injury Rehabilitation
and Compensation Act 2013
where an
employer pays remuneration to staff of
greater than $7,500.
Public liability insurance, while
not mandated in law, will often be
an express obligation within work
agreements. Work under the agreement
should not start until proof of the
necessary insurance cover is provided.
We reiterate such policies should
capture as a subbie, your direct liability
assumed in contract to indemnify your
principal, or to cover a principal as a
named insured or interested party.
This article does not address your
insurance requirements for damaged
assets or products liability. We will
address these in turn in future articles.
We encourage you to speak with
your broker who will ensure your
current insurance arrangements
cover your financial exposure for
personal injury liabilities.
Gadens
www.gadens.comThe higher your company is in the
chain of command on-site, the
greater the potential for those below
you to assert an entitlement under
your WorkCover policy.