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Understanding Workers Compensation

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As a business owner, having a clear understanding on workers compensation is crucial in order to protect both yourself, your staff and your assets. 

While the laws and regulations vary between states and territories in Australia, the Workers' Compensation and Rehabilitation and Other Legislation Amendment Act 2003 requires all Queensland businesses who employ workers to hold and maintain an accident insurance policy to cover their employees. 

After employing someone, in Queensland a business must take out an accident insurance policy within five business days. Failure to do so within this time frame risks exposure to heavy penalties, so it’s in everyone’s best interests to stay on top of their obligations when it comes to workers compensation - but how does it all work?

Defining Workers Compensation 

Also known as “workers comp”, workers compensation is a form of insurance designed to provide wage replacement and medical benefits to employees in the event that they get sick or injure themselves as a direct result of conducting their work, or while at work. This is supplied by the employer, with the exact inclusions (and exclusions) specified in the policy that the employer chooses. As an employer, workers compensation insurance will cover you for these costs too, as well as costs from possible common law claims.

The vast majority of Queensland employers get their workers' compensation insurance through WorkCover Queensland. Large businesses that employ at least 2000 workers may be eligible for self-insurance; however, they still need to meet the regulations outlined in the Workers' Compensation and Rehabilitation Act 2003.

As a business owner, the type of policy you take out will depend on the workers you employ, the type of business or organisation you run and your own role within the business. As a general rule, the most common insurance policy options include the following. 

Accident Insurance - Unless you’re a self-insurer, it’s compulsory in Queensland to insure your employees against work-related injury or illness.  Accident insurance covers you for all statutory and damages claim costs if one of your workers is injured, and is the most common choice. 

Household Worker Insurance - If you employ someone like a nanny, a gardener, a cleaner or in-home carer who work in or around a private dwelling house and who you pay directly, you need to insure them in case they’re injured whilst working for you.

Workplace Personal Injury Insurance - If you’re a director, partner of a partnership, sole trader or trustee, you’re not covered by your company’s Accident Insurance Policy because you’re not considered a worker under the Act, which means you need a separate policy. 

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Self Insurance - Some employers who are able to meet certain criteria, are in turn able to self-insure. When you self-insure, your organisation manages and takes on the costs and risks of its own workers’ compensation claims, so for many it’s certainly not the best choice. 

Volunteer Insurance - While insuring volunteers is not compulsory, WorkCover Queensland may be able to offer cover for volunteers like councillors, board members or delegates in their positions for not-for-profit, religious or charitable organisations or public bodies.

Work Experience Insurance - Business owners do not have to insure for work experience or vocational placements. However, WorkCover may be able to offer you insurance for private secondary school students, or registered training organisation students.

Registering Your Business With Work Cover

How much your accident insurance policy costs will depend on several factors, such as the amount your business pays in wages, your claims experience (the cost of any injury claims against your business), and your industry or sector. 

Premiums are paid at the start of the financial year, and are adjusted at the end if and when required. Work Cover even offers tips and tricks as to how business owners can reduce their insurance premiums by improving safety culture and performance in their workplace. 

To apply for a new workers compensation insurance policy, business owners will need to have the following information ready to go as a part of their application. 

  • Australian Business Number (ABN) if you have one

  • Australian Company Number (ACN) if you have one

  • GST Status and GST certificate (if available)

  • Your workplace details, including the business or trading name and physical address

  • The full names of all directors or business owners

  • The full names of additional parties you’d like to have access to the policy (optional)

  • Bank details for your business (optional)

  • Accountant details for your business (optional)

Sourcing Further Advice On Workers Compensation 

If understanding your finances, legal business obligations, or the in’s and outs of doing business isn’t your strong point, then it may be reassuring to know that you’re not alone. In fact, many businesses big and small enlist the services of an accountant and business advisor, in order to free up their time while knowing that their financial obligations are already taken care of by the professionals. 

What you choose to invest in or shy away from as a business owner can have a domino effect that ripples through your entire team - so are you confident in your financial choices? At Muro, we are more than just accountants. We offer our clients strategic business advice and ongoing support to help them reach their business and financial goals. Get in touch with us at Muro today to ensure that you’re on the right path for success in starting a business in 2022. 



Tania Muscillo