What is Workers Compensation insurance?
Workers compensation is a payment made to a deemed worker who suffers an injury or disease from or during their employment. It is one of the most significant investments that your business will make as the policy protects your employees income by covering their wages in the event of a claim. Workers compensation insurance is compulsory in Australia, although arrangements vary between states.
What does Workers Compensation insurance cover?
Workers compensation insurance is intended to cover the medical expenses and treatment and rehabilitation costs that relate to a work injury, and covers the injured worker's earnings while they are unfit for work.
- All employees who are deemed to work for you.
- Usually covers anyone receiving a wage or commission payment, including casual and temporary employees, apprentices, trainees and some contractors.
Does not cover
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Frequently asked questions
Do I need Workers compensation insurance?
In NSW, it is compulsory to have a workers compensation policy if:
- You engage workers or contractors deemed to be workers and pay, or expect to pay, more than $7,500 a year in wages, or
- You engage apprentices or trainees, or you are a member of a Group for workers compensation purposes.
For more details on the status of workers for workers compensation insurance, please visit the WorkCover NSW website.
Who is a worker for workers compensation purposes?
In NSW, a worker for workers compensation purposes is: ‘a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing)'.
However, as many employment relationships are not standard, some people are also classified as ‘deemed’ workers. To assist you to clarify whether a person is a worker for workers compensation purposes, WorkCover NSW has designed a self-assessment tool. This tool is available to all employers and is designed to identify the worker status of the person(s) through a series of simple questions.