WHS Fines in NSW Are Uninsurable — What This Means for Your Business
Since 10 June 2020, it is a strict liability offence to insure or indemnify against WHS penalties in NSW. Every fine comes directly from your bank account.
Understanding uninsurable WHS fines
Section 272A of the WHS Act 2011 (NSW), inserted by the Work Health and Safety Amendment (Review) Act 2020, makes it a strict liability offence to enter into, provide, or benefit from a contract of insurance or indemnity that covers a liability for a WHS monetary penalty. This provision commenced on 10 June 2020. It means that a WHS fine — whether $10,000 or $2,235,363 — comes directly from the company's or individual's own funds. No insurance policy can cover it.
Legal defence costs remain insurable. A PCBU or officer can still insure the cost of legal representation in WHS proceedings. But if the proceedings result in a fine, that fine is uninsurable. This distinction is critical for officers and directors who previously assumed their directors and officers (D&O) insurance would cover WHS penalties — it does not and cannot.
The prohibition is not unique to NSW. Victoria introduced an equivalent provision in September 2022, Western Australia in March 2022, and Queensland in 2024. The trend is clear: Australian jurisdictions are removing the ability of businesses to externalise WHS penalties to insurers. The penalty is intended to be felt directly by the entity and the individuals responsible.
With 88 new penalty notice offences added to the WHS Regulation from July 2024, and the average Category 2 prosecution resulting in fines of $200,000 to $400,000, the financial exposure is substantial. Industrial manslaughter, introduced in NSW by the WHS Amendment (Industrial Manslaughter) Act 2024, carries a maximum penalty of $20 million for a body corporate. The EHS Atlas Due Diligence Log documents officer compliance activities as evidence of due diligence under s.27.
Affected Industries
| Industry | Impact Level | Key Change | |
|---|---|---|---|
| Construction | high | Highest prosecution rate in NSW; falls, silica, SWMS breaches most common | View Solution → |
| Steel fabrication | high | Welding fume, chemical exposure, plant safety prosecutions increasing | View Solution → |
| General manufacturing | high | Plant guarding, chemical management, manual handling prosecutions | View Solution → |
| Aged care | high | Psychosocial hazard enforcement increasing; manual handling injuries | View Solution → |
| All industries | high | All WHS fines in NSW are uninsurable regardless of industry | View Solution → |
Protecting your business from uninsurable fines
Understand your penalty exposure
Use the EHS Atlas Penalty Calculator to understand the maximum fine your business and its officers face for each category of offence. These amounts come from your own funds.
Open Module →Document officer due diligence
Officers must demonstrate they took reasonable steps under s.27. Undocumented steps have no evidentiary value. The Due Diligence Log creates the evidence trail.
Open Module →Ensure legal defence coverage
Legal defence costs remain insurable. Review your D&O and management liability insurance to ensure WHS defence costs are explicitly covered.
Open Module →Close compliance gaps proactively
The most cost-effective protection against uninsurable fines is not being prosecuted. Systematic compliance reduces prosecution risk.
Open Module →Regulatory Timeline
Due Diligence Log and Penalty Awareness
EHS Atlas documents officer due diligence activities as evidence under s.27, tracks compliance status across all modules, and provides penalty exposure context for every regulatory obligation.
Prepare your compliance posture before the deadline.
We will walk you through every obligation, every deadline, and every module your organisation needs.