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OSH News – Please Don't Think You Aare Covered By Insurance

Published 01 Feb 2010

Employer Fined & Has To Pay $55,000 After OSH Prosecution

A Tauranga company has been fined $55,000 and the employee awarded $20,000 in compensation after an accident with a saw cut off his finger.

The employee has been awarded $20,000 in compensation and this is likely to be met by the employer's Insurance Company. But the employer will have to pay the $55,000 fine. The fine was imposed by the Auckland District Court on the 25th January 2010.

While the employer thought he was covered by insurance and had implemented several OSH systems it appears the crack in the wall surfaced when the employer failed to prove the training of that employee on that machine. There was no 'sign off' as having been trained.

This leads to several 'Must Read' points we at EAL wish to make to all our clients and readers

Employers who have arranged OSH insurance are advised they are not covered for any fines by a District Court Judge – they are only covered for awards of compensation. So if the employer loses the case then the employer will pay the fine.

The second point we wish to make is the insurance company will either accept a claim or not. If they accept the claim the insurance company has the right to 'take conduct' of the case. They usually do. So the insurance company appoints their own lawyers.

Our clients are advised that 'the client' is now the insurance company and not the insured – not 'the employer'. Think about that. We now have a situation where the lawyer is duty bound to do the best for his client – not the employer.

Further, our clients are strongly advised to notify their insurance company as early as possible if there is likely to be a claim or they risk having the claim declined.

Personal Grievances
The same applies for employers who insure against a Personal Grievance. It will be a different court but the rules are similar. The company will take conduct of the case if they accept a claim and only the 'award' is covered, fines are not covered.

Regarding OSH Systems & What Business Owners & Managers Need
Employers need to be able to prove they have taken 'every practicable step to prevent the accident from occurring'. The criteria by which employers are judged include the systems themselves but - more importantly – the staff training in the systems. Employers have to put themselves in a position where they can prove they have trained their staff in all the systems of OSH and they need dates, details and signatures of those trained.

For more information on how Employers Assistance can help you with Health and Safety compliance click here >>