WORKERS’ COMPENSATION MARKET UPDATE: Q1 FY22

Workplace Risk
By Sharon Rutherford – Head of Risk Consulting

 

KEY TAKEAWAYS FROM FY22: Q1?

Employers are reminded of the Victorian changes around primary psychological injuries that came into force on July 1, 2021.  These changes help eligible workers and volunteers receive treatment for work-related mental injuries. Employers are required to report these injuries within three business days. More information about the provisional payments is available via WorkSafe Victoria

Employer actual wage remunerations are now due and should already be closed for the FY21 policy period. Penalties can apply where wages are not declared. 

 

KEY MILESTONES / CONSIDERATIONS FOR CLIENTS FOR THE NEW QUARTER (FY22-Q2): 

WorkCover WA has announced significant changes to the Workers Compensation and Injury Management Act 1981. The Bill proposes recommendations by Workcover WA in its 2014 Review of the Workers’ Compensation and Injury Management Act 1981: Final Report. The proposed changes have the potential to alter the way workers’ compensation claims are managed and resolved, in addition to increased costs and burdens on employers in WA.  

A copy of the draft Bill, along with an explanation of key materials and details about making a submission, is available via WorkCover WA. Honan’s Workplace Risk team is committed to keeping you updated on the impacts to businesses and employees as this situation evolves – please reach out at any time with further queries.  

 

ANY INDUSTRY TRENDS YOU CAN SEE ARISING IN  OVER THE REMAINDER OF FY22?

The National Return to Work Strategy 2020 – 2030 (the Strategy) drives national action to improve return to work outcomes for Australian employees with a work-related injury or illness. Under the Strategy, Safe Work Australia and Griffith University have produced two reports examining the psychological response to injury among support workers, and the stigma injured or ill employees experience in the workplace. Crucially, both reports provide recommendations around supporting employees and facilitating a successful return to work.  

While the onus of responsibility remains on employers to manage their risk exposures, organisations’ Leadership Teams and WHS Systems alongside wider cultural forces are enhancing awareness about safe work environments and reducing stigma associated with workplace injuries.

 

 

Market Update: Q1 FY22

 

 

Market Update: Q1 FY22

Construction

Discover our forecast of insurance trends and business implications in the quarter ahead across the following sectors:

 

CORPORATE     FINANCIAL LINES    STRATA & REAL ESTATE    BRIC CONSTRUCTION INSURANCE   WORKERS’ COMPENSATION   

 

 

CORPORATE

By Poppy Foxton – National Head of Corporate Insurance & Risk Solutions
KEY TAKEAWAYS FROM FY22: Q1?

The last quarter has seen further stabilisation within the property and liability insurance markets, as rate increases continue to moderate with insurers clawing back profit following a difficult natural catastrophe season (CAT) season in 2020-2021.  Whilst the cost of transferring risk still favours the seller, the pricing pendulum has started to swing towards buyers. Longtail liability lines however are still seeing rate increases of 15-20%.  Certain segments are seeing much higher increases. For example, purchasing molestation cover remains highly challenging, with markets withdrawing capacity and decreasing appetite for these types of exposures. Honan is continuing to guide clients through more sophisticated risk transfer and retention program structure options as a strategy to manage these risks, either by electing aggregate deductible structures to offset premium increases, or through non-traditional forms of insurance such as discretionary mutuals or captives. 

In addition, the second COVID-19 Business Interruption (BI) test case was heard in the Federal Court recently, with the outcome handed down on October 8, 2021. An overview of the second test case, along with the key findings is available here.  An appeal date has been scheduled for November 2021 – we’ll provide an update when that judgment is delivered. 

 

 

KEY MILESTONES / CONSIDERATIONS FOR CLIENTS FOR THE NEW QUARTER (FY22-Q2): 

As NSW and VIC commence their paths out of lockdown, clients in the hospitality, tourism and retail industries are expecting improved business results for the quarter ahead. Honan is working closely with clients as they navigate the complexity of returning to the office and liability exposures around the relevant State/Territory orders concerning vaccinated vs unvaccinated customers.

Australia’s east coast experienced severe weather over the first weekend in October, a possible harbinger of events to come in the natural catastrophe (CAT) season. Meteorologists are again predicting equal chances of La Niña events, bringing with it a risk of associated storms and flooding.  Marking the official onset of Australia’s CAT season, October is the time for clients to work with their broker to ensure they’re adequately prepared. A CAT plan and undertaking preventative maintenance on your assets in advance are advisable at the beginning of Q2. 

 

ANY INDUSTRY TRENDS YOU CAN SEE ARISING IN  OVER THE REMAINDER OF FY22?

Insurers will continue to take a conservative approach to underwriting through pricing and capital deployment. For clients, this will mean insurance supply will continue to remain ample, leading to increased competition and further stabilisation of pricing. Following the Haynes Royal Commission, a raft of new financial services industry regulations come into effect in FY22 including the Claims Handling AFSL license requirements, revised Dispute and Complaints Processes, and the implementation of Target Market Determinations. The industry is preparing to implement new policies and processes designed to give greater protection to consumers, particularly retail clients.  

 

 

 

FINANCIAL LINES SNAPSHOT

By Henry Clark – Head of Professional & Executive Risks
KEY TAKEAWAYS FROM FY22: Q1?

In September, the Australian Cyber Security Centre (ACSC) published its annual cyber threat report for the 2020-2021 FY, revealing total self-reported losses from cybercrime in Australia in excess of $33 billion.  The escalating prevalence and severity of cyber attacks, along with changes in governance expectations, director liabilities, and regulatory reform is seeing business leaders place significantly more emphasis on their organisations’ cybersecurity and risk management strategies. Head here for our in-depth analysis of the cyber insurance market and updates across a range of different industries, including financial institutions, professional services, and technology. 

Following consecutive years of rate increases, there is clear evidence pricing is beginning to plateau for the public company D&O insurance market. Whilst insurers still applied rate increases during the Q1 renewal period, these were much lower than the prior quarter. This suggests the corrective portfolio measures required in the D&O space have largely been achieved and pricing is reaching a sustainable level for insurers. Challenges remain for companies with poor financials and industries heavily impacted by COVID-19. The ability of brokers to differentiate these clients by communicating in-depth knowledge of their risk exposures and being able to provide quality information about their risk management and risk mitigation activities is crucial to securing positive renewal outcomes for clients.  

The professional indemnity (PI) market remains challenging for certain professions, particularly design and construct professionals, digital banks, mortgage brokers, financial planners, and non-bank lenders. These professions still face supply and demand issues due to several insurers withdrawing from the market. Premium rates increased on average 15-20% in the last quarter, with insurers being highly selective in risks they choose to insure.  

 

KEY MILESTONES / CONSIDERATIONS FOR CLIENTS FOR THE NEW QUARTER (FY22-Q2): 

For management liability (ML) and insurable exposures for private enterprises, the full effects of COVID-19 remain unknown. As a result, underwriters are cautiously monitoring their portfolios and the solvency of Insureds. Crime and employment practices liability coverages continue to be the main triggers for ML claims, accounting for over 70% of combined losses for ML insurers.   

 

In this hardening insurance market where demand outstrips supply, Honan is working to ensure all clients understand the outlook for their renewal programs to ensure the right level of cover for their organisation. Our insurer partners expect strong underwriting submissions, based on the best available information, in order to optimise the price, terms, and conditions for your risks.  

 

ANY INDUSTRY TRENDS YOU CAN SEE ARISING IN  OVER THE REMAINDER OF FY22?

At the forefront of renewal negotiations are cyber placements. These remain challenging for certain risks and risk management around ransomware attacks in particular. Insurance carriers and cyber underwriting practices continue to evolve from a traditionally narrow focus on factors such as revenue, number of employees, record count and industry class, to a wider underwriting lens encompassing loss modelling tools and continual system scanning, both in-house and via outsourced IT security. Insurers are delicately balancing the growth of their portfolios, whilst remaining disciplined in the face of surging claims and declining profitability.   

As always, engagement with your broker well in advance of renewal dates is essential. 

 

STRATA & REAL ESTATE SNAPSHOT

By Kieran Drum- National Head of Strata
Matthew Henderson – Operations Manager: Underwriting Facilities & Strata
KEY TAKEAWAYS FROM FY22: Q1?

SOCIAL ENGINEERING ATTACKS

The Real Estate sector has been hit hard by an increase in frequency and severity of cybercrime incidents. Having moved much of their interactions and processing online over the last 18 months, real estate agents and property managers are especially vulnerable to social engineering attacks. Social engineering is a general term referring to an attack where the fraudster successfully impersonates a trusted employee, vendor, supplier, customer, or even a CEO or CFO; manipulating the victim into disclosing security details and sensitive information. These attacks often come in the form of phishing emails. Sadly, Honan clients are by no means immune to such threats. In the last quarter alone, we have seen multiple successful cyber attacks on our clients. Fortunately, in each instance, an appropriate level of cover was in place via a bespoke cyber policy.  

While many organisations believe they can rely on extensions to Professional Indemnity and Management Liability policies to provide adequate cover in the event of a cyber incident claim, this is not the case. To ensure their level of insurance is truly fit for purpose, real estate agents and property managers are strongly encouraged to review their internal cyber security strategies with their broker. 

 

EARTHQUAKE

On September 22, 2021a 5.9 magnitude earthquake struck Victoria, with tremors felt across the state and as far away as Newcastle in NSW. While there were no immediate reports of serious injury or death, damage included collapsed walls, shattered windows, and cracked roadsEarly estimates place the total cost of damage at $150 million, with almost 10,000 claims. At the time of publication (October 14, 2021), the earthquake has not been declared a catastrophe by the Insurance Council of Australia (ICA)Head here to find out more about how a catastrophe is defined and what this means. If you believe you have a claim, please contact your broker directly. 

 

 

KEY MILESTONES / CONSIDERATIONS FOR CLIENTS FOR THE NEW QUARTER (FY22-Q2): 

With heavy rainfall, hail, and tornadoes marking a busy start to the Australian storm season, the Bureau of Meteorology has predicted a 50% chance that La Niña conditions will return this spring (double the normal likelihood). As a result, there is a higher probability of damaging events taking place such as flooding. Clients are encouraged to prepare early (now) bensuring their level of cover is sufficient for the season ahead. If in doubt, please reach out to your broker to discuss.  

 

ANY INDUSTRY TRENDS YOU CAN SEE ARISING IN  OVER THE REMAINDER OF FY22?

Global supply chain interruptions due (in part) to COVID-19, along with Australia’s Black Summer bushfires in early 2020 have contributed to building material shortages; a trend which is expected to continue over the next 12 months. Materials most affected include steel, timber, roofing products, PVC, and electrical products. In addition, the prices of both containers and dry bulk shipping are increasing, with serious shortages in haulage between Australia and other countries.  

These shortages, together with pricing increases, have driven the cost of insurance repairs and replacements upwards. Unknowingly, many property owners may no longer have adequate insurance in place to reflect such increases in costs to repairs/rebuilds. Two simple insurance solutions can assist clients with this: 1) updated property valuations, and 2) those in strata buildings can review the Catastrophe Insurance percentage of the building sum insured 

 

 

BRIC CONSTRUCTION INSURANCE

By Chris Bovill – Chief Executive, BRIC
Travis Gauci – Head of Professionals, BRIC
Chloe Pham – Senior Consultant, BRIC

 

KEY TAKEAWAYS FROM FY22: Q1?

Building surveyors have continued to experience increases in Professional Indemnity (PI) premiums, excesses, and reductions in limits over the last quarter. However, we are now seeing the emergence of more stable PI premiums. Volatility in engineers’ PI has increased, with multiple insurers leaving the market during Q1, and new entrants simultaneously entering.

Builders operating in the SME construction market have faced several challenges, including shortages in the availability of contractors and sub-contractors, ongoing supply chain problems, and (for some states) restrictions to the number of workers on sites – all leading to increased project costs and delays. This requires constant monitoring to ensure insurance coverage reflects the sums insured, maximum construction periods, and vacant sites.

 

 

KEY MILESTONES / CONSIDERATIONS FOR CLIENTS FOR THE NEW QUARTER (FY22-Q2): 

For clients in the construction professions with upcoming renewals, insurers are paying particular attention to measures taken to limit risk exposures. We encourage clients to carefully consider the following in their applications to help improve the attractiveness of their risks to insurers:

  1. What type of buildings are you are providing services on – high rise, complex builds?
  2. The steps you take to minimise risk – written contracts, client selection, record keeping, etc.
  3. How COVID-19 has impacted your business and your ability to provide your services.
  4. If you or any of your employees have been involved in any disciplinary hearing or investigation, please provide detail around the circumstances, the outcome, and what you have done to remediate your processes to prevent a re-occurrence.
  5. For any claims or circumstances, you have reported, please provide a status update, details of what happened, any aspects that can be attributed to your client, the outcome, and how you intend to prevent a re-occurrence.
  6. Have you or your employees improved their qualifications or become members of a professional institute or association?
  7. As always, clients are encouraged to return their paperwork early.

For builders facing the renewal of their policies, further increases to construction insurance premiums are expected, particularly for material damage and liability (the latter attracting increases of up to 50 percent). Significant losses on long-tail liability claims are also contributing to higher excesses, especially for worker-to-worker claims.

 

ANY INDUSTRY TRENDS YOU CAN SEE ARISING IN  OVER THE REMAINDER OF FY22?

The Limitation of Liability through the Building Surveyors’ Professional Standard Scheme (PSS) will have a positive impact on the risk profile of Building Surveyors. However, this will take several years to be fully realised, and we do not expect any immediate reduction in premiums. More information about the PSS is available here. Together with the Australian Institute of Building Surveyors (AIBS), BRIC has successfully negotiated a premium discount with one insurer as an incentive to enhance your professional qualifications. Please reach out to discuss this with us.

Builders’ construction insurance premiums are not expected to stabilise in the short term, as insurers remain concerned about the profitability of these risks.

Engineers in NSW are now subject to the Design & Building Practitioners Act 2020 (NSW), and insurers are beginning to express concern on claims movement on the Statutory Duty of Care. As new insurance markets are becoming available for consideration, an active and early engagement with your broker ahead of renewal is critical.

 

 

WORKERS’ COMPENSATION SNAPSHOT

By Sharon Rutherford – Head of Risk Consulting
KEY TAKEAWAYS FROM FY22: Q1?

Employers are reminded of the Victorian changes around primary psychological injuries that came into force on July 1, 2021.  These changes help eligible workers and volunteers receive treatment for work-related mental injuries. Employers are required to report these injuries within three business days. More information about the provisional payments is available via WorkSafe Victoria

Employer actual wage remunerations are now due and should already be closed for the FY21 policy period. Penalties can apply where wages are not declared. 

KEY MILESTONES / CONSIDERATIONS FOR CLIENTS FOR THE NEW QUARTER (FY22-Q2): 

WorkCover WA has announced significant changes to the Workers Compensation and Injury Management Act 1981. The Bill proposes recommendations by Workcover WA in its 2014 Review of the Workers’ Compensation and Injury Management Act 1981: Final Report. The proposed changes have the potential to alter the way workers’ compensation claims are managed and resolved, in addition to increased costs and burdens on employers in WA.  

A copy of the draft Bill, along with an explanation of key materials and details about making a submission, is available via WorkCover WA. Honan’s Workplace Risk team is committed to keeping you updated on the impacts to businesses and employees as this situation evolves – please reach out at any time with further queries.  

 

ANY INDUSTRY TRENDS YOU CAN SEE ARISING IN  OVER THE REMAINDER OF FY22?

 

The National Return to Work Strategy 2020 – 2030 (the Strategy) drives national action to improve return to work outcomes for Australian employees with a work-related injury or illness. Under the Strategy, Safe Work Australia and Griffith University have produced two reports examining the psychological response to injury among support workers, and the stigma injured or ill employees experience in the workplace. Crucially, both reports provide recommendations around supporting employees and facilitating a successful return to work.  

While the onus of responsibility remains on employers to manage their risk exposures, organisations’ Leadership Teams and WHS Systems alongside wider cultural forces are enhancing awareness about safe work environments and reducing stigma associated with workplace injuries.

 

 

 

Read more from this issue of HoneIn:

 

Interview with Insurance News

 

 

Honing In on Our Partners: Keep it Cleaner

 

 

Managing Your Business’ COVID-19 Vaccination Risk Exposures

Employee Benefits

With COVID-19 outbreaks continuing to disrupt life around the country, maximising the vaccination rate has become a national priority.  Reaching the vaccination rate of 80% in Australia is now in our sights, raising questions about the best way to navigate a safe and sustainable return to the workplace.

The issue of whether employers should mandate vaccinations is receiving considerable attention around the world.   Multinational companies such as Google and Facebook have introduced a compulsory vaccination policy for staff. This move has been closely followed by Australian companies such as Qantas and SPC, with others indicating they will follow suit.

As businesses seek to understand their risk exposures, we explain how COVID-19 claims and liabilities are currently being viewed and summarise key considerations for employers as they navigate this next phase.

 

LATEST GUIDELINES ON MANDATING VACCINATIONS

In Australia, four tiers have been set out by The Fair Work Ombudsman (FWO) to help businesses assess where it might be “lawful and reasonable” to mandate COVID-19 vaccinations in their workplaces. The tiers range from Tier 1, where workers are exposed to the most risk and therefore it may be reasonable to enforce vaccinations, through to Tier 4, where the risk of transmission or infection is likely to be lower.

Tier 1 work — employees are required to interact with high-risk people (e.g., border control, hotel quarantine)

Tier 2 work — employees are required to interact with vulnerable people (e.g., health care or aged care workers)

Tier 3 work — employees are required to interact with the public in the course of their employment duties (e.g., retail workers at essential stores)

Tier 4 work — employees have minimal face-to-face interaction with others.

A workplace may have employees performing work in different tiers, which might change over time. With no test cases currently available to show the tier system in action, these guidelines raise the question of what steps are considered “reasonably practicable” for employers to help keep staff safe. At the time of publication, this decision sits with employers.

 

NO FAULT COVID-19 INDEMNITY SCHEME

Having consulted with the medical, healthcare, business, and insurance sectors, the Federal Government has released the details of the national no fault COVID-19 Vaccine Claim Scheme (the Scheme). The Scheme will provide Australians with efficient access to compensation for COVID-19 claims related to the administration of a Therapeutic Goods Administration (TGA) approved COVID-19 vaccine delivered through a Commonwealth Government approved program, irrespective of where that vaccination occurs.

From 6 September 2021, Australians who suffer injury and loss of income due to receiving the COVID-19 vaccine can register their intent to claim from the COVID-19 vaccine claims scheme webpage. The Scheme will be backdated to February 2021.

The Scheme will cover the costs of injuries exceeding $5,000 caused by a proven adverse reaction* to a COVID-19 vaccination. Independent experts will assess the claims, and compensation paid based on the recommendations. Compensation payments under the Scheme will be fully funded by the Commonwealth.

Australians who receive a COVID-19 vaccination and experience an adverse reaction are encouraged to report it to their doctor who can provide the information to the TGA.

 

COVID-19 VACCINES & WORKERS’ COMPENSATION

Separate to the COVID-19 Vaccine Claim Scheme, in some circumstances, an adverse reaction to the COVID-19 vaccine may be covered under workers’ compensation. To be covered, the insurer will need to be satisfied that:

  • the vaccine injury arose out of, or in the course of the worker’s employment; and
  • the worker’s employment was a substantial contributing factor to the vaccine injury or was the main contributing factor for a disease, injury; or
  • in the case of heart attack or stroke injury, the nature of the employment was a relevant factor in increasing the risk of the injury (see below).

While each claim needs to be assessed on the relevant facts and evidence, several issues may increase the likelihood that a vaccine injury is covered under workers’ compensation, including whether an employer:

  • took steps to arrange for its employees to receive a COVID-19 vaccine
  • encouraged or induced its employees to receive the vaccination to obtain benefits for its business
  • permitted or directed employees to have a COVID-19 vaccination during ordinary working hours; or
  • provided instructions to employees relating to the administration of the vaccine.

Workers’ compensation outcomes will always be subject to the individual merits of the claim, however, the key factor determining liability is the relationship between the workplace and how an injury arose out of or in the course of employment.  Therefore, the role of the employer is important when considering the exposures presented by COVID-19 vaccinations and how this can be determined to be in the course of employment. The link between a vaccine injury and the worker’s employment is easier to establish where a worker is influenced by their employer’s requirement to receive the vaccine or is subject to a Government Public Health Order. In these circumstances, there is a greater likelihood of the vaccine injury being covered under workers’ compensation. When lodging a claim, employers and workers will need to provide information on the link between their employment and the serious adverse reaction to the vaccine.

If a vaccine injury is a “heart attack injury” or “stroke injury”, the worker is also required to establish that the nature of their employment significantly contributed to the injury. In practice, this may require the worker to satisfy additional requirements. For example, the worker may need to provide evidence they opted for a particular vaccine brand due to their employment.

 

IMPACTS TO PREMIUM IF A WORKER MAKES A COVID-19-RELATED CLAIM

In NSW, icare has confirmed it will exclude COVID-19 claims and COVID-19 vaccination claims from the individual claims experience, meaning it will absorb the costs of the claim without passing on premium impact to the policyholder. This will protect any individual employer or industry from disproportionate premium increases due to COVID-19. This is a continuation of the Job Keeper exemption during 2020 where regulators supported the exclusion of these payments per the declaration of rateable remuneration. Whether the remaining State regulators follow icare’s lead is yet to be seen, however, Honan is liaising with our regulatory contacts to understand their position.

Businesses are encouraged to report any COVID-19 outbreaks directly to the relevant State or Territory regulator (e.g., WorkSafe Victoria, SIRA, etc.) and consider an employee who has tested positive to COVID-19 as having a reportable injury.

 

COMMUNICATING WITH EMPLOYEES

The TGA has provided guidance on communications regarding COVID-19 vaccinations to support the Government’s roll-out.  Employers should familiarise themselves with these requirements which include conditions around offering incentives to people who are fully vaccinated.

 

A FINAL NOTE

These issues remain a complicated area of discussion in the business community and the situation is evolving each day. We encourage businesses to seek legal advice based on their individual circumstances where appropriate before proceeding.

 

Alexandra Slimming

Head of Global Benefits

alexandra.slimming@honan.com.au

 

Jules Paolino 

Workplace Risk Consultant 

jules.paolino@honan.com.au

 

 

Flexible work: Here to stay, but have you nailed the formula?

 

 

*The TGA will provide clarity on recognised adverse reactions. 

 

WORKERS’ COMPENSATION SNAPSHOT: FY21 Q4

Workplace Risk

By Jules Paolino – Workplace Risk Consultant

 

KEY TAKEAWAYS FROM FY21: Q4?

All States (except for QLD) have applied premium increases to workers’ compensation schemes. The highest year-on-year impact is within NSW, with increases of 1.40% – 1.44% of wages. Find out more here about the changes to workers’ compensation premiums for individual States and Territories. As always, our dedicated Honan Workplace Risk team is mobilised to provide innovative, cost-effective solutions to all clients, and to assist them in achieving premium savings wherever possible.

 

KEY MILESTONES / CONSIDERATIONS FOR CLIENTS FOR THE NEW QUARTER (FY22-Q1):

The Victorian Parliament has passed new laws to help eligible workers and volunteers receive treatment for work-related mental injuries.

From 1 July 2021, eligible Victorian workers and volunteers who suffer a work-related mental injury will be able to access ‘reasonable treatment’ and services for up to 13 weeks while their claim for compensation is being determined, regardless of the outcome of their claim. More information about these provisional payments is available from WorkSafe Victoria.

 

ANY INDUSTRY TRENDS YOU CAN SEE ARISING IN  FY22?

The liability complexities associated with working from home and work-related mental injury claims continue to challenge the insurance market. This, coupled with the mismanagement of accepted claims has resulted in increased premium for clients.

At Honan, we have identified a gradual increase in the prevalence of liability exposures and subsequent claims activity. With this in mind, we are working with our clients on critical injury and illness prevention initiatives. For example, for clients that we identify as having a high risk of claims, we partner with rehabilitation experts to provide physical and mental health webinars and ergonomic assessments.

We encourage clients to adopt a proactive approach in the management of potential injury and illness. This includes empowering management teams to identify potential injuries and register concerns with Honan as early as possible.

 

 

Discover more market updates from this edition of HoneIn.

MARKET UPDATE: National Workers’ Compensation 2021-2022

Workplace Risk
With the 2021/22 financial year just around the corner, there are changes set to take place for Workers’ Compensation schemes around the country. To keep you up to date, we have compiled the latest legislative updates by State and Territory, outlined the key information you need to know, and included practical actions you can take to set your business and employees up for success in the year ahead.

 

STATE UPDATES

VIC

The claim experience period for 2021/22 will be three years from 1 January 2018 to 31 December 2020. However, the last 12 months of that experience period (claims received between 1 January 2020 to 31 December 2020), will NOT have a statistical claims estimate (SCE) applied, or any medical and like expenses included. Furthermore, only actual weekly compensation payments will be used. This will have an impact on the premium payable for 2021/22 with reductions likely to occur, however, the full impact of SCE costs will be realised in 2022/23.

The average industry premium rate for 2021/22 will remain unchanged at 1.27%. Premium capping will also remain at 30% to limit any year-on-year rate increases.

  • VIC Premium notices for 2021/22 are expected to be available from 5 July 2021 and revised notices will be generated by Worksafe each weekend thereafter.
  • A 5% discount will be available for upfront premium payments made by 31 August 2021.
  • A 3% discount will be available for upfront premium payments made by 1 October 2021.
  • Payment by instalments will be available for all transactions after 1 October 2021.
  • Actual wages declarations are due 30 days after renewal.

TO DO: ENSURE REMUNERATION DETAILS ARE CURRENT 

Any wage updates received before 30 June 2021 will be reflected in the 2021/22 premium calculation. Otherwise, WorkSafe calculates the premium based on the remuneration estimate for 2020/21, indexed by 4.75%. You must certify your Rateable Remuneration by 22 October 2021 for the 2020/21 policy period.

To avoid potential financial penalty, you will need to provide a revised remuneration estimate within 28 days, if, at any time, you become aware that: 
  • Your remuneration has increased by more than 20% from the previous estimate, or
  • What you have paid in remuneration to date is greater than your current estimate for the whole financial year.

To update your remuneration or any other policy details, please visit WorkSafe’s Online Employer Services portal or seek advice from your Honan Workplace Risk Consultant.

 

NSW

During the 30 June 2020 renewal period, icare excluded JobKeeper payments from premium calculations and held off passing on proposed industry rate increases. This year, however, icare is reviewing its position.

icare has announced premium increases ranging from 1.40% – 1.44% of wages for 2021/22, with the intent to increase this year-on-year for the next two years. For employers who struggled during COVID-19 or have experienced an increase in claims costs, this may have significant impacts on premiums. Many employers in NSW had a similar experience in 2016 when icare introduced its new premium methodology, resulting in premium increases of more than 30%.

  • NSW Premium notices for 2021/22 are expected to be received within 4 weeks from June 30 (or the Employer renewal date) and will renew automatically based on prior-year estimates with indexation applied.
  • Depending on the size of the employer, discounts of up to 5% will be available for upfront premium payments made within 1 month of the invoice date.
  • Payment by instalments available, subject to terms.
  • Actual wages due 30 days after renewal.

 

QLD

Changes to premiums are not expected in QLD for 2021/22.

Average premium rates were unchanged in 2020/21 at $1.20 per $100 of wages paid. Workcover QLD has not raised the average premium rate since 2015, which continues to provide stability for QLD businesses.

  • QLD Premium notices for 2021/22 are issued once the actual wages from 2020/21 are submitted.
  • Discounts of 5% will be available for upfront premium payments made before 13 September 2021.
  • Payment by instalments available, subject to terms.

 

SA

Since the introduction of the Return-to-Work Scheme in 2015, the average premium paid by South Australian businesses has reduced from 2.75% to an all-time low of 1.65%, with the Scheme fully funded. Despite the financial impact of the COVID-19 pandemic, the ReturnToWorkSA Board kept the 2020-21 premium rate at this record-low rate and actively supported SA businesses by deciding to exclude Job Keeper payments from premium calculations.

Despite improving return to work performance in 2020-21, a higher number of claims are meeting the serious injury threshold than expected. The additional support and services provided to this group significantly increased Scheme costs. With increased cost pressure it is now necessary to increase the average premium rate to 1.70% for 2021-22.

  • SA Premium notices for 2021/22 are issued after the actual wages from 2020/21 are submitted. These are due by 17 September 2021.
  • Actual wages can be used to calculate deposit premium for 2021/22, removing the requirement for wage estimate submissions.
  • No discounts are available for early or upfront payments.
  • Payment by instalments available, subject to terms.

 

 

RISK STATES & TERRITORIES

WA

Workcover WA has confirmed a 4% increase in the 2021/22 recommended premium rates for compulsory workers’ compensation insurance.

This translates to 1.70% of total wages (up from 1.64% the previous year).

 

ACT

Changes have occurred to the ACT State levy. The levy will now be 2.80% for all policies commencing on or after 1 July 2021.

 

TAS

Changes have occurred to the Tasmanian Asbestos levy. The levy will now be 2.50% for all policies commencing on or after 1 July 2021.

 

NT

No changes. Stamp duty remains at 11% of coverage extensions (Common Law or Principles Indemnity)

  • Terms negotiated before the Client renewal date.
  • Premium to be paid within 14 days of receipt of invoice.
  • Payment by instalments available, subject to terms.
  • Actual wages are due 31 July 2021 for all accounts renewing on 30 June.

 

PREMIUM FUNDING

You may wish to consider a premium funding arrangement with Honan. The arrangement can involve financing the full payment as a lump sum, typically over a series of 6 – 10 instalments, to save upfront costs and give you access to discounts (where available).

Some points to note:

  • Financials are required for all loans over $150,000 (Management Accounts FY21 and Audited Financials FY20)
  • Clients will receive the maximum benefit in VIC, NSW, and QLD:
  • Worksafe VIC will provide a 5% discount if the premium is paid by 31 August 2021, or a 3% discount if paid by 1 October 2021
  • In NSW, icare will provide a 5% discount if the premium is paid within 1 month of the invoice being issued.
  • Workcover QLD will provide a 5% discount if the premium is paid by 17 September 2021

 

HAVE YOU REVIEWED YOUR INDUSTRY CLASSIFICATION?

Premiums are largely influenced by the industry classification of your business. If the industry classification is incorrect on your policy, you may be paying considerably more in premium than necessary. Honan can assist with the re-classification, please contact us using the below details to discuss further.

 

CERTIFICATE OF CURRENCY

If there is no outstanding premium to pay on your account, you can obtain a Certificate of Currency now, either online, directly from your insurer, or by requesting this from Honan.

 

WITH YOU ALL THE WAY

As always, the Honan Workplace Risk team is available to assist you.  Feel free to reach out at any time.

 

 

Sharon Rutherford

Head of Risk Consulting

sharon.rutherford@honan.com.au

 

Jules Paolino 

Workplace Risk Consultant 

jules.paolino@honan.com.au

 

 

Flexible work: Here to stay, but have you nailed the formula?

Workers’ Compensation Snapshot: FY21 Q2-Q3

Workplace Risk

In this update, we share practical insurance insights from the quarter that’s been, and forecasts for the quarter ahead.

 

KEY TAKEAWAYS FROM FY21: Q2?

2020 showed us that change can come literally overnight and that as individuals and businesses, we need to be adaptable and resilient. In the context of workers’ compensation, something that has not changed is our continued responsibility to provide a safe work environment for our people. The widespread shift to remote working arrangements for many businesses created the potential for new risk exposures, while legislative changes were introduced under certain workers’ compensation schemes in response to COVID-19. 

Safe Work Australia’s recent COVID-19 report revealed as at 31 July 2020, there were at least 533 COVID-19 related workers’ compensation claims nationally. Of these claims lodged by 31 July 2020:

  • 38% were for workers who contracted COVID-19.
  • 34% related to mental health impacts associated with the pandemic.
  • 29% involved testing or isolation requirements (some workers’ compensation schemes covered the costs of isolation arrangements and COVID-19 medical tests). 

Claim numbers are expected to rise in response to Victoria’s second wave of infections that peaked in August 2020. 

It has never been more important for businesses to understand their risk exposures, and ensure their processes, policies, and procedures remain relevant and responsive to the changing situation.  

 

KEY CONSIDERATIONS FOR FY21: Q3?

CGU’s withdrawal from the Victorian Workers’ Compensation scheme was a big surprise for all. The transition plan is not yet finalised, with CGU’s existing contract with Worksafe valid until 30 June 2021, however, there has been discussion of this being brought forward to expire on 31 March 2021. A policy transfer freeze was implemented by CGU following the impact of COVID-19 and due to end on 31 December 2021. It has been indicated that a policy transfer freeze will be extended until 30 September 2021.

With allocation of the CGU book of business yet to be confirmed, it is anticipated that businesses will be permitted to put forward a submission for their preferred Agent once CGU finalise their tenure.

NSW icare has announced the appointment of Richard Harding as CEO and Managing Director. This will be an area to watch as Harding seeks to navigate the NSW scheme back from the challenges of 2020. 

NSW icare has also announced the appointment of their legal panel for workers’ compensation claims, which means the scheme has now removed the option for Employers’ “client preferred” Solicitors.  This will have a big impact for any Lawyers and Clients who relied on these long-standing relationships.  A transition arrangement is in place with the new panel coming into full effect from 30 June 2021.

 

WHAT INDUSTRY TRENDS SHOULD CLIENTS MONITOR OVER THE COMING QUARTER?

With JobKeeper and JobSeeker payments due to end (on March 28 and March 31, respectively) and many businesses still being impacted by COVID-19 restrictions, there continues to be uncertainty around job security and income security.  The reality is that many people will seek alternate options to close these gaps, and spikes in workers’ compensation claims are expected to continue. 

To demonstrate your commitment to employee safety and wellbeing, we encourage businesses to continue communicating with staff about changes to Government subsidies and resulting impact to the business and your staff.  

 

We’re With You All The Way

Feel free to reach out to discuss your risk exposures. We are here to help you ensure your processes, policies, and procedures reflect your evolving needs.

Sharon Rutherford
Head of Risk Consulting
sharon.rutherford@honan.com.au

 

 

Find out more about Honan Workplace Risk Consulting

WA: New Industrial Manslaughter Laws with Important Implications for Businesses

Insurance Updates

In an effort to harmonise the Work Health & Safety (WHS) regimes across Australia, Western Australia has now passed legislation to update its Work Health and Safety Act 2020 (WA), (the Act).

 

Workplace Health & Safety Overhaul

The new laws will likely come into place in April 2021. This will include several changes, with the most notable being the Industrial Manslaughter Legislation:

If a ‘Persons Conducting a Business or Undertaking’ (PCBUs) is engaging in conduct knowing the conduct is likely to cause death “or serious harm” to an individual, the crime will now carry potential imprisonment term for up to 20 years and a fine up to $5,000,000 for an individual person and up to $10,000,000 for a body corporate.

 

Critical Actions for Directors & Officers

Any organisations based in Western Australia should now review their work health and safety procedures to ensure they meet the new legislative requirements.

These new changes are intended to make safety front of mind and help prevent any future fatalities from occurring.

Under the new legislation, it is important to note that officers can also be charged for crimes committed by a PCBU in certain circumstances, including when the PCBU’s conduct was attributable to the officer’s neglect, or engaged in with the officer’s consent or connivance.

Officers (in particular) should ensure they understand their obligations with respect to the PCBU’s WHS duties and officer due diligence.

 

What about Insurance?

Up until now, companies could transfer the risk of these penalties via insurance, however this will now be prohibited going forward. Companies will therefore need to ensure that policies offering WHS Penalties cover are not entered into.

 

We’re with you all the way

To find out more about these changes, feel free to reach out at any time.

 

Dan McCallum

Head of Client Services (WA)

dan.mccallum@honan.com.au

 

 

Learn more about Honan Workplace Risk consulting here.

 

Managing Risk the Smart Way

Workplace Risk

Many businesses invest considerable time and effort to ensure the safety of their customers. But in the event that an accident does occur, what you do immediately afterwards is critical to achieving a positive and timely outcome for everyone involved. In this three-part series, Risksmart will highlight three key steps businesses can take to be ready to respond effectively to an incident.

 

STEP 1: INCIDENT REPORTS

It is prudent for all businesses to complete an Incident Report in the event a member of the public suffers an injury or property damage from their business activities. Incident Reports should form the foundation of any business’ risk management procedures because Courts will consider these when assessing the liability of a defendant.

 

WHY ARE INCIDENT REPORTS IMPORTANT? 

The importance of Incident Reports was emphasised in the recent case of Baker v Bunnings Group Limited [2020] NSWDC 310,[1] wherein a customer tripped and fell on a raised kerb as she traversed the carpark at Bunnings. In its decision, the District Court of NSW considered the Incident Report completed by Bunnings shortly after the incident. The Incident Report outlined that the area was inspected by staff and that it was free from slipping hazards. It also went on to outline there were no obstructions around the kerb.

The Court ultimately found in favour of Bunnings, concluding that the kerb presented an obvious tripping hazard to the claimant, which she ought to have avoided.  Whilst the Court considered other evidence such as photographs and oral statements to reach their decision, this case demonstrates that Courts will carefully consider Incident Reports when investigating the facts of an incident and assessing the liability of a defendant.

 

CRITICAL INFORMATION TO CAPTURE

Incident Reports are designed to capture critical information pertaining to the incident. They should be completed as soon as possible after the incident to ensure that any relevant facts are not forgotten. Information in the Incident Report should be factual, accurate and objective – free from opinion and emotion.

 

REPORTS SHOULD INCLUDE THE FOLLOWING (AT THE VERY LEAST):

  • Date, time and location of the incident. It is helpful here to include a diagram or map detailing the exact location. Photographs should also be taken of the incident area (more on this later).
  • A detailed description of the incident as reported by the member of the public, including their alleged damage or injuries.
  • Visual observations of the incident area.
  • Name and contact details of all parties involved.

REPORTS SHOULD NOT INCLUDE:

  • An opinion on liability or a statement conceding that your business was responsible for or caused the incident.
  • Assumptions or inaccurate information about the events leading up to the incident or the incident itself.
  • Reference to any similar or prior incidents.

 

A final note

Risksmart can utilise Incident Reports to track your long-term incident data, which can be used to identify trends in your business’ key risk areas and help prevent future incidents.

Feel free to contact Risksmart today to discuss how our Incident Reporting solutions can be tailored to your business.

 

Faramarz Ostowari

National Technical Claims Manager

Faramarz.ostowari@risksmartclaims.com.au

 

 

Meet the Risksmart team

 

 

 

1 For a comprehensive summary of the judgement, please see the following link from our colleagues, Barry Nilsson.

Avoiding Work Party Pitfalls: Tips for Celebrating Safely

Workplace Risk

At Honan Workplace Risk, we’ve seen our fair share of claims arise from end of year work events. We have consulted with many clients, who simply were not aware their business is liable in the event of a staff member’s accident or injury while attending work events. Here are our tips for minimising risk exposure for your organisation.

 

Time & location does not matter

Even when a work event is scheduled out of hours or offsite, the business must uphold its duty of care and ensure a safe environment for all staff. Essentially this means if a member of staff is injured during a work-related event, they could pursue a workers’ compensation claim for any medical expenses or loss of income.

 

What are your risk exposures?

End of year celebrations can create conditions for two broad types of risk exposures: misconduct and physical injury. Overindulging and intoxication increases business exposure, which may give rise to misconduct or a physical injury. Any injury or allegation sustained during the work event is considered ‘throughout the course of employment’ and subsequent liability may be accepted.

 

What can you do?

While there are risks involved, there are actions you can take to reduce your business’ exposure.

 

Tip 1: communicate early and consistently with your workforce and set clear expectations about acceptable conduct. Your people reflect your brand, and unprofessional behaviour isn’t a great look.

 

Tip 2: if the event is offsite, remind leaders in advance that the venue is an extension of the workplace and the same behaviours and conduct are expected there. For example, encourage Managers to be accountable for their direct reports so any disrespectful or dangerous behaviour can be immediately addressed in line with your company policies.

 

Tip 3: appoint staff ‘supervisors’ to monitor behaviour during the event, particularly if alcohol is being served.

 

Tip 4: consider a ‘get home safe’ plan for staff. This could involve an Uber discount or hiring a minibus for the event. Exiting an event is often a time when people are exposed to a higher level of risk. Certain legislation extends to journeys to and from work, which could leave your business liable in the event of an injury.

 

Closing comments

It is important to reward your staff for their hard work and commitment throughout the year. However, incurring a workers’ compensation claim from poor supervision or inadequate planning can spoil the celebrations and reduce the likelihood of future events. Communicate your business expectations early and remind everyone to enjoy themselves without putting each other and the business at risk.

Finding Your COVID-Safe Cadence: 5 Tips for Navigating the ‘New Norm’

Specialist Services

The ‘new norm’ will look different for all businesses across the globe. Whether it’s a complete return to office for an entire workforce, a portion of the workforce, or more of a flexible, iterative approach decided by the individual on a weekly basis, one thing is certain – to navigate this next critical phase safely and sensitively, all workplaces will require a formal transition plan. A robust COVID-Safe workplace transition plan involves careful planning and close consideration of the varied circumstances of your people. To support leaders in shaping their transition plans, we’ve tabled 5 key areas to think about.

 

1. How SAFE is your ‘COVID-Safe’ plan?

Businesses are now required to regularly review and update their COVID-Safe plan in line with public health advice and changes to restrictions. Implementing an effective return to office strategy requires easing your workforce into a ‘new normal’, e.g. introducing staggered shifts.

Employers may even like to consider returning certain teams to the office ahead of others. A phased or alternating approach may reduce anxiety among staff, compared to an immediate return to 5-days in the office, surrounded by a full staff.

 

2. Time for a MENTAL HEALTH check?

Employers need to have a clear understanding of the mental health support mechanisms in place for their people. Now more than ever, employers need to play a protective role in supporting the mental health and wellbeing of their people; with resources readily available both in the office and when working remotely.

While all employees contribute to a mentally healthy workplace, employers must foremost demonstrate leadership in this area – providing staff with 24/7 ‘mental helpdesks’ such as employee assistance programs (EAPs), or other high-quality mental health resources, whether they be internal or external (e.g. Lifeline, BeyondBlue). Awareness about these valuable services requires ongoing communication throughout the organisation, ideally in tandem with internal initiatives to promote optimal mental wellbeing among staff. Prevention is better than cure!

Changes to working arrangements can also impact team dynamics, especially as employees shift from secure solo remote working set ups, to busier new conditions. Employers must support their people through this transition with sensitivity and patience. Noting each employee will have a unique change threshold and anxieties particular to their circumstance, leaders must tread carefully, and avoid rushing the process. Team and one-on-one catch ups should be encouraged – these serve as important forums for employees to socialise their needs, concerns and ideas through this new chapter. 

 

3. ENGAGE before you rearrange

Engaging staff early, and often, about their personal circumstances and work-home-productivity rhythms and preferences is paramount. Understanding individual circumstances will allow leaders to design a customised return to office experience, ensuring critical employee concerns and working needs are met. Organisations should aim to establish a regular communication cadence with staff to ensure new changes and updates are integrated and understood as they evolve over time. Regular one-on-ones and team meetings should be set up to discuss expectations around returning to the office, with a view to achieving ‘sweet spots’ where business needs meet employee preferences. To learn more about employees’ preferences and concerns about remote work, plus insights on how companies can evolve for remote work, be sure to check out our key takeaways from Atlassian’s 2020 global remote work study in Flexible Work: Here to Stay, But Have You Nailed the Formula?

 

4. CLEAR is KIND

As they say, assumption is the mother of all stuff-ups – never assume your entire workforce is singing from the same hymn sheet. Ongoing efforts must be made to ensure important messages are aligned and shared through standardised communication channels. Achieving an optimal ‘new norm’ will require continuous, considered communication of critical information. For instance – the number of people who can work in the office at any one time, the use of meeting rooms and shared staff spaces, parties responsible for monitoring safety, how breaches or concerns can be raised. Critical updates must be communicated clearly, early and regularly through agreed channels to ensure the narrative remains consistent and builds trust. Sending regular updates via email, through the intranet and / or social media channels and regular team meetings are all examples of utilising effective communication channels.

 

5. WH&S at all times

As more of us move from #WFH and back to the worksite, there has never been a better time to review and refresh internal Workplace Health and Safety policies and procedures. Workplaces must ensure they are complying with new COVID-related standards, revisit safe work practice inductions or update sessions as required to re-engage employees in their transition to new working conditions. Hosting Health and Safety refresher briefings is a great place to start – an opportunity to remind employees about existing procedures and educate them on new policies too.

 

We’re with you all the way

To learn how Honan can further support your business, please reach out at any time.

 

Grace Rod – Client Executive

grace.rod@honan.com.au

 

Sharon Rutherford – Head of Risk Consulting

sharon.rutherford@honan.com.au

 

Jules Paolino – Workplace Risk Consultant 

jules.paolino@honan.com.au

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