All posts tagged: Lawyers against insurance companies

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What happens if you don’t have workers’ compensation insurance?

What happens if you don’t have workers’ compensation insurance?

Contract Workers Compensation Insurance – Do you have to pay workers compensation for independent contractors – How to fight workers compensation – Uninsured Employer Workers Compensation – Who is a worker? – Who is an employee? – WorkCover Qld Contractors – Workers Comp Lawyer for Employer – Workers Compensation Process – Workers Compensation Penalty – Workers Compensation Insurance 


The labour market has changed considerably in recent years. We’ve seen an explosion of apps and websites that help businesses outsource services. It seems as though most of us are now consultants/freelancers/contractors of some description! In the construction industry alone, it’s not unusual to see services sub-contracted down the line through several entities before the first nail is hammered.

So, in this new world where everyone (and yet no one) is a boss – what happens with workers’ compensation insurance? And more importantly – what are the consequences of being uninsured?

Obligation to insure

In Queensland, an employer must, for each worker employed, insure and remain insured, for their legal liability to pay compensation and damages to their workers: section 48 of the Workers’ Compensation and Rehabilitation Act 2003 (Qld).

Workers vs contractors

The WCRA defines ‘workers’ for the purpose of workers’ compensation.

Under the Act, a worker is a person that is employed under a contract and who is an employee for the purpose of assessment for PAYG withholding under the Taxation Administration Act 1953 (Cth). Schedule 2 of the WCRA expands that definition, identifying particular circumstances where a person will be considered a worker.

Determining whether a person is a worker (and therefore whether a business is required to hold workers’ compensation insurance) is not always straightforward. Businesses should not assume that they are relieved from their obligation to insure, simply because they engage contractors instead of employees. Each arrangement a business has with an individual is often unique. A person who an employer considers is a contractor, may actually be a worker for workers’ compensation purposes.

Consequences of failing to insure

If an employer fails to take out workers’ compensation insurance within 5 business days of employing any worker or workers, WorkCover Queensland may impose a penalty of $33,522.50 (275 penalty units).

Recovery of compensation and unpaid premium

If a claim is made against an employer that holds no workers’ compensation insurance in Queensland, that claim will be managed by WorkCover. WorkCover is the statutory insurer and only WorkCover can pay compensation and damages to a worker.

Under section 57 of the WCRA, WorkCover may recover, from the employer, amounts that it has paid to a worker as compensation and damages. WorkCover may also recover from the employer a penalty equal to 50% of the amounts paid, as well as the unpaid premium.

Example workers’ compensation recovery

So what financial risk is posed to an employer that holds no workers’ compensation insurance? The below example illustrates the potential threat posed by a claim in Queensland:

Weekly compensation and medical benefits paid: $100,000

Common law damages paid: $500,000

Total: $600,000

Penalty (50% x $600,000): $300,000

Potential recovery: $900,000 + unpaid premium + $33,522.50 (penalty for failing to insure)

For businesses

Businesses that engage the services of individuals (including sole traders) should consider their obligation to hold workers’ compensation insurance. The cost of workers’ compensation premiums is dwarfed by the financial consequences of an uninsured claim.

BOOK A FREE CONSULTATION for advice and information about your rights and obligations in a workers’ compensation matter, by calling (07) 3067 3025 or contact us online.

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Kate DenningWhat happens if you don’t have workers’ compensation insurance?
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No Liability for Volunteers

Case note: Goodhue v Volunteer Marine Rescue Association Incorporated [2015] QDC 029 

Liability of Volunteers – Liability of Incorporated Association – Liability of Volunteer Workers – Liability of Committee Members of Incorporated Association – Civil Liability Act Volunteers – Liability of Voluntary Association – Immunity of Volunteers


The Plaintiff, Bill Goodhue, was the owner of a vessel called ‘Warlock’ (Vessel), a 12 metre ferro-cement ketch yacht.  He purchased the Vessel in 1983 for $17,500 and lived on it intermittently.

He anchored the Vessel in Marine Stadium, on the Spit, at Southport, Queensland.  In August 2003, he left Australia for New Zealand, having secured the Vessel with a Danforth style anchor. He asked two friends to keep an eye on it while he was overseas.  The Plaintiff was a member of the Volunteer Marine Rescue (the Defendant) and had taped his membership card to the Vessel’s porthole, with the name and mobile number of one of the friends.

On 25 October 2003, the Defendant responded to an emergency call from a nearby vessel, ‘Manuhere’.  The Plaintiff’s Vessel was dragging its anchor.  The volunteers pulled up the anchor (an Admiralty anchor and not a Danforth) and re-anchored the Vessel.  After moving it, the water depth was checked with a depth sounder.  The volunteers checked on the position of the Vessel later in the day and were satisfied it was holding its anchor.  It was seen up to a week later, in the same position.

Over a week after it was moved, the Vessel ran aground, resulting in damage to its interior, electrics and contents.

Issue for determination

The Plaintiff’s case was that Defendant breached its duty of care to him, because the volunteers moved the Vessel without his permission.  He argued that it was re-anchored without sufficient depth and too close to the western shore in Marine Stadium.  The Plaintiff said that his Vessel was simply yawing on its anchor and that the volunteers should have directed the Manuhere to move instead.


The Court made these findings:

  • It was necessary for the volunteers to move the Vessel and if the volunteers had not taken that action, the Vessel would have struck the Manuhere.
  • The scope of the duty of care owed by the Defendant did not extend to contacting the Plaintiff.
  • The Defendant’s duty was limited to re-anchoring the Vessel in a competent manner and it did so.

In the judgment, McGinness DCJ said that a broader duty would have a devastating effect for the operations of the Volunteer Marine Rescue.

The Court also expressed the view that where the law gives immunity to an individual volunteer from civil liability, that immunity should extend to the volunteer organisation for whom they do volunteer work.   However, as the Plaintiff failed to prove that the actions of the volunteers actually caused the Vessel to run aground, this finding did not determine the case.

The Plaintiff’s claim was dismissed with costs.  The decision is of interest because it is the first judgment that has considered whether an organisation using volunteers could be immune from civil liability under Queensland law.

BOOK A FREE CONSULTATION for advice and information about fraud in a negligence claim by calling (07) 3067 3025 or contact us online.

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Kate DenningNo Liability for Volunteers
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InDefence covers legal and technical issues in a general way. Changes in circumstances or the law may affect the completeness or accuracy of the information published. InDefence is not designed to express opinions on specific cases, to provide legal advice or to establish a relationship of client and lawyer between Denning Insurance Law and the reader, or any third party. No person should act or refrain from acting solely on the basis of this publication. You should seek legal advice particular to your circumstances before taking action on any issue dealt with in this blog.