The Workers' Compensation and Injury Management Amendment Bill 2012 ("the Bill") clarifies common law insurance requirements under the Workers' Compensation and Injury Management Act 1981 (WA) ("Act").

Clarification was required due to uncertainty over the scope of the insurance obligation introduced on 1 October 2011 by the Workers' Compensation and Injury Management Amendment Act 2011 (WA). The purpose of the Bill is to provide certainty in this regard.

The Explanatory Memoranda of the Bill outlines that in order to provide certainty to employers, brokers and insurers the Bill:

  • Clarifies the definition of 'damages' for insurance purposes;
  • Provides that employers do not require common law insurance under the Act for 'deemed workers' - that is, workers of whom the employer would not be the employer but for being deemed an employer for compensation purposes only;
  • Preserves public liability indemnity arrangements for employers of deemed workers;
  • Strengthens the ability to prescribe insurance policies under the Act and to set out terms and conditions;
  • Enables regulations to limit the amount of insurance which an employer is required to effect and maintain consistent with current insurance industry standards, including the $50 million cap for common law liabilities arising out of a single event; and
  • Preserves terms, conditions and exclusions in employer indemnity policies to the extent these comply with the corrective amendments in the Bill.

The Second Reading of the Bill took place in the Legislative Assembly on 3 May 2012.

The Third Reading of the Bill took place in the Legislative Assembly on 20 June 2012 and the Bill has now been passed by both Houses of Parliament.

The Office of the Minister for Finance, Commerce and Small Business has confirmed the Bill was recently delayed due to the progress of the State Budget through Parliament. In addition associated Regulations underpinning the Bill are in the process of being drafted and it is anticipated that the Bill and Regulations will be gazetted by the end of July 2012.

The Bill and the Associated Regulations have retrospective effect and will apply with effect from 1 October 2011.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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