Understanding your workers compensation insurance cover

A workers compensation insurance policy provides cover for your workers in the event of a work-related injury or illness.

Workers compensation insurance will cover the costs of supporting your injured worker which may include:
  • weekly benefits
  • rehabilitation services
  • medical and hospital expenses
  • some personal items damaged in a work-related accident
  • a lump sum payment for death or permanent impairment

All employers in NSW (except exempt employers) must have a workers compensation insurance policy. An employer is any business that employs or hires full-time, part-time or casual workers.

When you first apply for cover, the cost of your premium is based on the industry you work in and how much your business pays in wages. We also factor in any incentives, discounts or premium adjustments.

For larger, experience-rated employers, the cost of your policy will be adjusted depending on the cost of claims you’ve made – just like any other kind of insurance.

Calculate the cost of your premium now

What you need to do

As an employer, it’s your responsibility to meet specific obligations when an incident occurs. If a worker covered by your policy informs you of a work-related injury or illness, you have an obligation to let us know within 48 hours.

You also need to:

  • provide first aid and make sure your worker gets the right care in a timely manner
  • record the incident in your register of injuries.
  • help your worker to recover at work.

Report an injury or incident now

Return to work 

When a worker is recovering from a work-related injury or illness, you have obligations in assisting your worker in their journey back to work.

Learn more about helping people return to work

Keeping a register

If you're an employer, you must keep a register of injuries to record workplace injuries or illnesses sustained by workers, even if there has not been a claim.

The register of injuries must include:

  • name of the injured worker
  • worker's address
  • worker's age at the time of injury
  • worker's occupation at the time of injury
  • industry in which the worker was engaged at the time of injury
  • time and date of injury
  • nature of the injury
  • cause of the injury.

The register of injuries containing every notifiable incident can be recorded in a hard copy or on a computer. You must make sure your team is appropriately trained to access the register.

You may also be able to gain approval from the State Insurance Regulatory Authority (SIRA) to use the register of injuries as notification of any workplace injury.

Although it’s not required by the legislation, we encourage you to report and record 'near misses.' A near miss should be considered as a warning sign and may indicate a potential problem that could result in serious injury.

There are penalties for failing to keep a register of injuries.

Download SafeWork NSW injury register template  

Duration of your policy

All policies cover a period of 12 months unless you request a shorter term.

If you’re a small employer, the first period of insurance will run for 11 to 12 months from the day you take out the policy. This is because the policy must align with the end of a month.

For all employers taking out a policy for the first time, your policy starts as soon you contact us.

Your policy and the legislation

You and your workers have legal rights and obligations under workers compensation laws and guidelines.

The legislation forms a workers compensation and workplace injury management framework that provides for:

  • prompt treatment of work-related injuries
  • effective and proactive management of such injuries
  • medical and vocational rehabilitation following injuries
  • income support for workers during incapacity.

The system creates a fair, affordable and financially viable workers compensation system and ensures contributions by employers are commensurate with the risks faced in their industry.

Employees working interstate or overseas

NSW based companies who send their NSW based workers overseas or interstate for specific projects of work on a temporary basis are covered under their NSW workers compensation insurance policy provided the length of time spent out of the country or state is less than six months at any one time.

However, in addition to your NSW obligations, you should also check any requirements of that country or state to which you are sending workers.

Details of the payments made to workers while overseas can be found in the Wages Definition Manual.

To check whether a worker is connected to the state of NSW for workers compensation insurance purposes, you can determine the ‘State of Connection’ by following a five step hierarchical test. When a Test identifies a single State of Connection there is no need to consider the remaining tests.

A worker’s employment is connected with:

Test A: the State/Territory in which the worker usually works in that employment, or

Test B: if no single State/Territory is identified by Test A, the State/Territory in which the worker is usually based for the purposes of that employment, or

Test C: if no single State/Territory is identified by Test A or Test B, the State/Territory in which the employer’s principal place of business in Australia is located, or

Test D: in the case of a worker working on a ship, if no single State/Territory is identified by Test A, Test B or Test C, a worker’s employment is, while working on a ship, connected with the State/Territory in which the ship is registered or (if the ship is registered in more than one jurisdiction) the State/Territory in which the ship most recently became registered, or

Test E: If no single State/Territory is identified by Test A, B, C or D (if applicable), a worker’s employment is connected with a State/Territory if the worker is in that State/Territory when an injury happens to that worker and there is no place outside Australia under the legislation of which the worker may be entitled to compensation for the same matter.

Refer to SIRA’s website Journey to Work and State of Connection for more details about State of Connection.

Overseas workers (from NSW, working overseas)

Wages, salary, fringe benefits and/or any other consideration provided by an employer to any worker who is normally based in NSW, while that worker is temporarily employed or working overseas, is counted as remuneration. This is to apply whether the payments are made within or outside Australia. Employers should also verify with the relevant overseas authority the legislative requirements of that country.

Where a NSW employer engages a worker to work overseas, the employer must incept a workers compensation insurance policy (or equivalent) in accordance with the legislative requirements of that country. Wages, salary, fringe benefits and/or any other consideration to the worker is not counted as remuneration for the NSW workers compensation insurance policy.

You can also refer to the Journey to Work and State of Connection details through the SIRA website. 

Workers compensation legislation

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