A recent costly reminder for employers was highlighted by the Sydney Morning Herald after an employer was left facing an $822,000 workers compensation liability. The additional premium was not a fine, nor related to a safety breach, but due to a little-understood policy provision. While the circumstances are specific, the lesson is widespread, given that many employers do not fully understand the long-tail financial exposure embedded in their workers compensation policies.
Less Known Clauses with Big Consequences
In a startling revelation from Sydney, Australia, a single overlooked clause in a workers’ compensation policy has cost an employer a staggering $822,000 fine. The incident, involving NDIS provider Mitchell Jones, highlights the hidden risks lurking in the fine print of insurance agreements and why businesses must be aware of overage details and conditions.
The workers compensation policy includes a provision where employers remain liable for injured workers, even after they leave the company. This meant Jones was responsible for ongoing payments totalling $822,000, despite no longer employing the individual. The clause was buried in legal jargon and not flagged during the sign-up process, making it easy to miss unless reviewed by a legal expert.
What Happened?
In this case, an employer assumed their financial responsibility ceased once an injured worker left their business. However, under the NSW workers compensation scheme, a technical policy provision meant the employer remained liable for long?term weekly payments and claim costs, even after the worker was no longer employed. The clause was lawful, enforceable, and embedded in complex legal wording. It was not clearly highlighted during policy set?up and only became visible once claim costs escalated, by which time it was far too late to mitigate the exposure.
Why this matters to every NSW employer?
Many business owners incorrectly believe workers compensation is “set and forget”. This case proves that an assumption can be financially devastating. Key risks highlighted by this case include:
- Long?tail claims can follow your business for years
- Liability can continue after employment ends
- Policy summaries rarely explain worst?case scenarios
- Small and mid?sized employers are often the most exposed
- Premiums are only one part of the true cost of a claim
For employers already navigating rising premiums, skills shortages and regulatory reform, an unexpected six?figure liability can threaten business viability overnight.
The real issue: Unseen risk, not non?compliance
Importantly, this employer did nothing illegal or unethical. The exposure arose from a lack of visibility and understanding of how the workers compensation scheme actually operates in practice. Compliance alone does not equal risk control.
A timely reminder for employers
This case reinforces several critical reminders for NSW businesses:
- Workers compensation is a risk management issue, not just insurance. Insurance transfers some risk however, it does not eliminate it
- Claim cost drivers matter more than premiums. Duration, wage reimbursement, treatment pathways and work capacity decisions all shape long?term exposure
- Early decisions have long?term consequences. Poor injury management in the first weeks of a claim can multiply costs over years
- Fine print becomes very real — very fast. Clauses that seem theoretical only matter when something goes wrong
How ABILITY GROUP helps employers avoid these outcomes
At ABILITY GROUP, we work with employers before injuries occur and immediately when they do. Prevention and early intervention can be key points where financial risk is truly controlled.
We assist employers through:
Workers Compensation Risk Reviews - we identify hidden exposures in:
- Claim history and trends
- Injury duration and treatment escalation
- Return to work delays
- Policy and scheme vulnerabilities
Injury Management & Return to Work Expertise - our specialists actively reduce:
- Claim duration
- Weekly payment dependency
- Long?term liability exposure
- Disputed and psychological claims
Proactive Employer Advisory - we help business owners and leaders understand:
- What your policy really means
- Where long?tail risk sits in your business
- How to make informed decisions when injuries occur
Health, Safety & Prevention Integration - we address injury risk at the source, which can help reduce long-term claim severity.
The bottom line
The $822,000 case isn't an outlier; it is a warning for all businesses.
For NSW employers, the greatest workers compensation risks are often:
- "Invisible" - businesses can be unaware of clauses and impacts, given workers compensation is not typically a specialist competency
- Misunderstood - businesses
- Discovered too late - find out the financial impacts sadly, only after the damage has been done
Understanding your obligations is important. Understanding your exposure is essential.
At ABILITY GROUP, we help businesses across Australia navigate workplace injuries, return to work, workers compensation claim management and resulting premium impacts. If you want clarity, confidence and control over your workers compensation risk, contact ABILITY GROUP to get help.
Further Information
Source: Sydney Morning Herald
Title: The quirk in the fine print that cost this employer $822,00.00
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