Sad death of stonemason from silicosis highlights a risk for those using labour hire
It was reported yesterday that Mr White, a stonemason working on the Gold Coast, passed away from silicosis. In a separate report, his brother has also been diagnosed with the same deadly disease.
Under Australia WorkCover legislation all workers are covered through their employers workers’ compensation insurance. As such, employers are somewhat protected.
There is a serious problem however where the organisation under which the work was performed was using labour hire. The risk arises as the claim for worker’s compensation will be made against the labour hire company’s policy. The labour hire company is thus indemnified.
The workers’ compensation insurer then has subrogated rights back to the owner of the work place. That is, the company that engaged the worker through labour hire. Under the rules of subrogation the workers’ compensation has all the rights and remedies of the worker against the owner of the work place.
When a claim is received by the owner of the workplace, it is considered under that organisation’s public and product liability insurance policy.
A typical policy provides protection through an insuring clause that reads:
Subject to the Limits of Liability stated in the schedule and the terms and conditions of this cover section, we will pay all sums that the insured person shall become legally liable to pay for compensation in respect of:
(a) personal injury;
(b) property damage;
(c) advertising liability,
happening during the period of insurance within the territorial limits as a result of an occurrence in connection with your business or products.emphasis mine
Due to the frequency and size of the recoveries made by the various workers’ compensation insurers around Australia, public and products liability insurers have been imposing higher excesses and other restrictions on the protection they are prepared to provide.
When it comes to silicosis, more and more insurers are including a blanket exclusion for claims arising from or occasioned by silicosis.
For an average business, even in stone making or other industries such as mining, metal polishing and the like where silicosis is a risk the risk to the public is very low.
There is a very real risk however for the organisation where they have a labour hire worker constantly exposed to the dust that gives rise to the disease.
If the labour hire worker contracts the illness during a period that he or she is working for your organisation and this exclusion is in place, you will not have any liability insurance protection available to you should a claim be forthcoming.
The same risk applies to other illnesses such as passive smoking and asbestos which are also blanket exclusions under modern public and product liability insurance coverages.
So, to some tips.
Please retain copies of all your public and product liability insurance policies and the policy schedules for as long as you are in business and even after you have ceased to trade.
Always consider the limits of liability you have in place each and every year remembering that a claim could come for someone being injured today but who does not know about it for many years down the track.
Arguably there is a greater risk for those who have elected to have a manifestation trigger as to when an injury is said to have occurred for the illness may have been contracted at a time and then moved back to what the insurance industry refer to as an occurrence wording, ie, the injury has to occur during the period of insurance.
You can always go from this type of occurrence wording to a manifestation wording for you can have dual insurance, that is two policies covering the same event but cannot go in the other direction for you can find you have a gap in coverage.
Consider the risks associated with using labour hire when it comes to subrograted rights of recovery by workers compensation insurers. You may only have someone in working at your premises for a short time but who can say if it was during your time that they were injured. You may well be one of many organisations brought into an recovery action.
Insurance is complicated and for this reason, I strongly urge every business owner to engage in a qualified, professional insurance broker who can act as your trusted adviser with all the risks facing you in business.