Workers compensation insurance in the ACT: a guide for employers

Who sells workers compensation insurance in the ACT

The ACT scheme runs through private insurers approved to write workers compensation in the territory. WorkSafe ACT lists five, and it says that if you need a policy you should contact an approved insurer directly. You can also use a broker. Zurich surrendered its ACT licence in 2022, so older lists you find online may be out of date.

Some large employers are licensed to self-insure instead. WorkSafe ACT's list includes Brickworks, Coles Group, Holcim (Australia) Holdings, Pacific Formwork Employment, the University of New South Wales, Wesfarmers and Westpac. For a small business, an approved insurer is the only route.

Who you must insure

WorkSafe ACT's rule is that an employer in the ACT must have a workers compensation policy to cover its workers. The exemptions in section 147 of the Act are narrow: licensed self-insurers, some cross-border and joint-policy arrangements, and employers prescribed by regulation. There's no small-wages exemption.

The ACT's definition of worker reaches some contractors. Under section 11 of the Act, a regular contractor who personally does part or all of the work can be deemed your worker, although an executive officer of a corporation isn't. If you regularly engage the same individuals on contract, check whether they fall in, and tell your insurer.

How premiums are set in the ACT

Unlike WA and Tasmania, the ACT doesn't publish recommended or suggested premium rates. WorkSafe ACT says approved insurers consider many factors, including your industry type, claims history, wages bill and number of employees. Because each insurer weighs those differently, quotes for the same business can vary, which makes it worth asking more than one insurer or using a broker.

Every premium notice must also show the Default Insurance Fund levy, which funds the safety net described below. It is set outside the insurer's control and appears as a separate item.

Sole traders, partners and directors

WorkSafe ACT is explicit that a person who is a sole trader or in a partnership isn't a worker under the scheme, so workers compensation won't pay for your own injury. If you work for yourself, you need your own cover: see insurance for sole traders. Whether a company can cover its working directors is a question to put to the insurer; WorkSafe ACT's guidance doesn't set out an optional director cover the way WA's does.

What happens if you don't insure

The ACT sets out a staged process in section 147 of the Act. If WorkSafe ACT finds you uninsured, it can issue a default notice giving you ten business days to take out a policy. If you don't, a second ten-day notice follows, and then a notice requiring you to stop carrying on business, effective after five business days. When a policy is taken out after a default notice, at least 30% of the premium has to be paid up front.

The money is significant. Offences carry penalties of up to 250 penalty units, and under section 149 the regulator can recover double the avoided premium, counted back up to five years.

The Default Insurance Fund

The Default Insurance Fund is the ACT's safety net. If a worker is injured while working for an employer that didn't hold the required policy, the Fund can pay the worker's compensation, so the worker isn't left without support. ACT Treasury says the Fund is then entitled to recover up to three times the compensation paid and the premium from the uninsured employer. For an employer, that is the strongest reason of all not to let cover lapse.

Workers compensation in other states and territories

Each state and territory runs its own scheme, and an employer registers where its workers are based. If you employ people in more than one state, check each scheme, or see the eight schemes side by side.