Small busi­ness: An­thony O’Brien

Work­ers' com­pen­sa­tion in­sur­ance pro­vides pro­tec­tion in case of in­jury or ill­ness

Money Magazine Australia - - CON­TENTS -

As you’ll dis­cover when start­ing a small busi­ness and em­ploy­ing staff, it’s crit­i­cal you ar­range busi­ness cover such as work­ers’ com­pen­sa­tion in­sur­ance. This is pur­chased by busi­ness own­ers to pro­tect them­selves and their work­ers, and it pays ben­e­fits in the event of a work­place or work-re­lated ac­ci­dent, in­jury or ill­ness, ac­cord­ing to Fred Schebesta, co-founder of Fin­ Work­ers’ com­pen­sa­tion schemes are man­aged at a state level, and the cost of the poli­cies and their ben­e­fits will vary by lo­ca­tion.

Un­like other types of in­sur­ance, work­ers’ com­pen­sa­tion in­sur­ance is com­pul­sory if you em­ploy staff and the pre­mi­ums will also dif­fer depend­ing on the size of the busi­ness, the num­ber of em­ploy­ees and your in­dus­try. The lat­est statis­tics from Safe Work Aus­tralia show that in 2014-15 there were more than 107,000 se­ri­ous work­ers’ com­pen­sa­tion claims. Labour­ers had the high­est rate of claims – al­most three times higher than the na­tional rate. The health­care and so­cial as­sis­tance in­dus­try had the high­est num­ber of claims (16%) and agri­cul­ture, forestry and fish­ing had the high­est rate of claims (13.7%).

A hard les­son learned

For­tu­nately, as a writer, a nasty pa­per cut is prob­a­bly the most dan­ger­ous work­place haz­ard I face. That said, my busi­ness, Cor­p­write, em­ploys some staff and there­fore we must cough up for work­ers’ com­pen­sa­tion. I also dis­cov­ered to my hor­ror just how se­ri­ously in­sur­ers en­force the com­pul­sory as­pect of work­ers’ com­pen­sa­tion. A year or so ago I lost my busi­ness part­ner, Chris Walker, a long-time Money writer, af­ter a pro­tracted ill­ness. From the time of Chris’s di­ag­no­sis in March 2014, it was a two-year chal­lenge for the busi­ness and there were some slip­pages. Early on we’d de­cided to shift to a ge­o­graph­i­cally more con­ve­nient com­mer­cial lo­ca­tion. As part of the hur­ried move, we over­looked chang­ing our ac­count de­tails with our work­ers’ com­pen­sa­tion in­surer. Even with our lat­est con­tact de­tails promi­nently dis­played on our web­site, the pol­icy pa­per­work failed to find us. We only recog­nised the er­ror of our ways when a le­gal rep­re­sen­ta­tive act­ing on be­half of the in­surer con­tacted us. Around $1000 later, which in­cluded the re­moval of a credit black mark against our com­pany, along with some frus­trat­ing phone calls and emails, we’re thank­fully on track with our work­ers’ com­pen­sa­tion.

What you would pay

As men­tioned ear­lier, the pre­mi­ums for work­ers’ com­pen­sa­tion poli­cies are largely de­ter­mined by your in­dus­try clas­si­fi­ca­tion and your em­ployee re­mu­ner­a­tion. Also the vary­ing work­ers’ com­pen­sa­tion leg­is­la­tion in each state could mean that the owner of a brick­lay­ing firm in Western Aus­tralia might be up for a dif­fer­ent pre­mium to a sim­i­lar busi­ness in Tas­ma­nia. “That said, work­ers op­er­at­ing across state and ter­ri­tory bor­ders should be cov­ered by a pol­icy from the state or ter­ri­tory in which they usu­ally and reg­u­larly work or op­er­ate from,” says Schebesta. Adding to the cross-bor­der com­plex­i­ties is the fact that with work­ers’ com­pen­sa­tion, in the ACT, North­ern Ter­ri­tory, Tas­ma­nia and Western Aus­tralia pre­mi­ums can vary from in­surer to in­surer, ac­cord­ing to Fin­der. How­ever, in NSW, Queens­land, Vic­to­ria and South Aus­tralia there are fixed pre­mi­ums from all in­sur­ers. This means that shop­ping around for a bet­ter pre­mium is point­less even if you’re un­happy with your in­surer. To give you an in­di­ca­tion of the pre­mi­ums, let’s as­sume you’re op­er­at­ing in the NSW build­ing in­dus­try. Ac­cord­ing to bro­ker NWC In­sur­ance, a small con­struc­tion firm with three em­ploy­ees and turn­ing over $2 mil­lion a year can ex­pect to pay an an­nual pre­mium of $14,847. We’ve as­sumed that all em­ploy­ees are earn­ing $150,000 a year and the firm isn’t em­ploy­ing ap­pren­tices, who won’t have the same level of ex­pe­ri­ence as fully trained trades­peo­ple.

An­thony O’Brien is a small busi­ness and per­sonal fi­nance writer with 20-plus years’ ex­pe­ri­ence in the com­mu­ni­ca­tion in­dus­try.

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