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Getting workers compensation insurance

Most employers in NSW must have a workers compensation insurance policy to help cover work related injuries or illness.

If a worker suffers a work related injury or illness, the policy can pay for weekly benefits, medical and hospital expenses and a range of other services to help the worker recover.

Our role is to regulate these workers compensation insurers (listed below) and the system generally, so that it is sustainable, affordable and provides support for injured workers.

List of insurers:

icare workers insurance

(can offer policies for all industries except coal)

Most employers can only take out a workers compensation insurance through icare.

Guild

(can offer policies to pharmacies operating in NSW and employers providing child care services)

HEM

(can offer policies to members of the Australian Hotel Association NSW and members of the Registered Clubs NSW)

Coal Mines Insurance

(can offer policies in the coal industry)

Catholic Churches Insurance

(can offer policies to employers whose main business or industrial activity concerns the Roman Catholic Church)

Statecover mutual

(can offer polices to Councils in the NSW local government industry)

Racing NSW

(can offer policies in the thoroughbred racing industry)

What details do I need to provide?

Knowing your yearly wages and how many workers you need to get insurance for are usually the two most important things you'll need to know.

1. Determining yearly wages

You’ll be asked to provide the total amount of wages you paid in the last financial year (or you expect to pay in the coming financial year).

When calculating your total wages you include any:

  • salary/wages
  • overtime, shift and other allowances
  • over award payments
  • bonuses, commissions
  • payments to working directors (including directors' fees), or amounts received instead of wages (including payments to family members)
  • payments to pieceworkers
  • payments for sick leave, public holidays and the associated leave loadings
  • value of any substitutes for cash
  • employer paid or payable superannuation contributions (including the superannuation guarantee levy)
  • grossed up value of fringe benefits (allowances subject to fringe benefits tax are counted at the grossed up value, that is the value of the benefit multiplied by the relevant Australian Tax Office fringe benefit formula)
  • long service leave payments (including lump sum payments instead of long service leave)
  • termination payments (lump sum payments in respect of annual leave, long service leave, sick leave and related leave loadings)
  • trust distributions  to workers where the distribution is in lieu of wages for work done for the trust

Wages does not include:

For more information read the wages definition manual.

2. Determining who's a worker you need to provide insurance for

There are many types of workers and contractors who may be required to be covered by your workers compensation policy.

It is important to understand the different types of workers to see:

  • if they are considered a 'worker' of yours and need to be covered by your workers compensation policy
  • if you should be declaring their wages
  • how their premium is calculated

Some workers are 'deemed' to be workers engaged by you and must be covered by your workers compensation policy, however their wages are declared differently.

Schedule 1 of the Workplace Injury Management and Workers Compensation Act 1998 provides a comprehensive list of 'deemed' workers.

We can help you

1. Worker Status Tool

You can also use the Work Status Tool to help determine the status of workers.

The tool should only be used as a guide. To formally determine a worker’s status, you will need to lodge a private ruling.

2. Private rulings

If you're an employer, we can  help you determine whether a person is a worker or contractor for premium calculation purposes.

If you want to apply for a private ruling you need to fill out this online application form.

A private ruling does not impact upon a person’s ability to lodge a workers compensation claim nor can it be used in any claims-related matters.

Am I exempt?

As an employer, you’re not required to have a policy if all of the following applies to you:

  • you pay $7500 or less in annual wages (employers in certain industries will not be exempt regardless of the wage bill, please refer to the workers compensation market practice and premium guidelines for the industries with $0 exemption limit) and
  • you don't employ an apprentice or trainee, and
  • you’re not a member of a group for premium purposes.

Exempt employers do not need a policy, however if a worker gets injured you must call us on 13 10 50 and we will arrange for icare to manage the workers claim.

Even if you are exempt, you still must provide assistance with injury management and return to work.

Any claim against an exempt employer will be managed by icare, even if you don't have a policy and incurs a $175 administration fee.

If your conditions change in a way that affects your obligations (for example, your annual wages bill has grown larger than $7500), you must contact an insurer immediately and take out a workers compensation policy.

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Failure to obtain and maintain a workers compensation policy can result in fines and penalties.

SIRA may take recovery proceeding against you. The maximum fine that can be imposed by court is $55,000 or six months imprisonment, or both.

How do I cancel a policy?

Your insurer can cancel your policy in the following situations:

Ceased trading

Your policy can be cancelled if the business has ceased trading. You will need to provide evidence of having ceased trading to the licenced insurer agent that holds the policy.

Liquidator/trustee in bankruptcy appointed

Your policy can be cancelled if a liquidator/trustee in bankruptcy has been appointed and the business has ceased trading.

Business is sold by employer

Your policy may be cancelled if the business is sold. The new owner may need to take out a new workers compensation insurance policy covering their employees. Give us a call of talk to your insurer for more information.

Other situations

In all other situations you should discuss with your insurance agent the reason for wanting the policy cancelled.

Licenced insurers cannot cancel a policy if:

  • you take out a new policy at a lower premium
  • you no longer have employees. In this case the policy can be cancelled at expiry of the policy period
  • a liquidator or administrator is appointed and the employer continues trading even if the liquidator or administrator attempts to take out a new policy