Workers compensation in Queensland: what it covers, and the exposures that sit outside it

Workers' compensation is one of the few insurance arrangements Queensland employers do not obtain through the ordinary commercial market. If you employ workers in Queensland, you will generally need an accident insurance policy with WorkCover Queensland unless you are licensed as a self-insurer.

That can make the subject look settled. The policy is compulsory, the insurer is known, and there is nothing obvious to review.

But the statutory scheme is only part of the picture, and the exposures that catch employers out are mostly the ones sitting just outside it.

Who counts as a worker under Queensland workers compensation?

Whether someone is a "worker" is not determined simply by the label in their agreement. WorkCover Queensland's guidance on determining who is a worker applies four tests in sequence: whether there is a contract for the performance of work, whether the person is specifically excluded under the legislation, whether they are specifically included, and whether the arrangement is a contract of service.

Contractor arrangements therefore need review rather than assumptions based on invoices, ABNs or the name given to the arrangement.

Two points that regularly surprise employers: Unpaid interns. Unpaid interns gaining practical experience or a qualification can be treated as workers, as they would be if paid. Volunteers. Volunteers may be treated differently from employees and contractors for workers' compensation purposes. Check WorkCover Queensland's guidance on who your policy needs to cover before assuming they are included or excluded.

Apprentices, trainees and labour hire arrangements each have their own treatment. If your workforce has changed shape since the policy was set up, the classifications are worth checking rather than assuming they still hold

Business owners sit outside the scheme

If you are a sole trader, a company director, a partner in your own partnership, or employed by a trust where you are the trustee, you are generally not a worker under your own business's policy. A work-related injury to you does not attract statutory compensation.

WorkCover Queensland offers optional Workplace Personal Injury Insurance for eligible people in this group. It is not compulsory, and it is often overlooked—often by the person whose absence would most affect the business.

Beyond that, these options sit entirely outside the statutory scheme: personal accident and illness cover, income protection, and key person arrangements. The right combination depends on the structure and

what happens to revenue if that person is unavailable for six months.

Workers who cross state borders

If a worker performs work in more than one Australian state or territory, only one workers compensation scheme will usually apply. WorkCover Queensland applies a state of connection test, set out in its guidance on covering interstate and overseas workers. The first questions are where the worker usually works, where they are usually based for the employment, and where the employer's principal place of business in Australia is located. Further statutory steps can apply where those questions do not resolve the position. If the state of connection is not considered properly, the employer may be holding the wrong policy, or may not have appropriate cover in place at all.

Businesses with people working interstate, remotely or across Australia and New Zealand should review their arrangements before a change in location or employment structure creates an unintended gap.

WHS penalties cannot be insured in Queensland

Queensland law prohibits a contract or arrangement that purports to insure or indemnify a person against a monetary penalty under the Work Health and Safety Act 2011 (Qld). A term that seeks to provide that indemnity is void to that extent.

This changed relatively recently. Section 272A was inserted by the Work Health and Safety and Other Legislation Amendment Act 2024, so older guidance on the position in Queensland may no longer be correct.

That does not mean every cost connected with a workplace health and safety investigation is treated the same way. The terms of the policy and the circumstances involved determine how legal defence costs, investigation costs, and related expenses are treated. Management liability, directors' and officers' liability, or statutory liability arrangements may address them differently.

The distinction between a monetary penalty and the costs of responding to an investigation or prosecution matters most when an allegation arises—which is a poor time to read the wording for the first time.

What else sits outside the scheme

Employers frequently assume the WorkCover policy covers anything employee-related. It does not. Several substantial exposures sit elsewhere:

Employment practices. Bullying, harassment, discrimination and unfair dismissal claims are not workers' compensation matters. Defence costs alone can be significant, and cover is generally arranged under a management liability or employment practices liability policy.

Directors' and officers' exposure. Personal liability attaching to directors for their conduct in running the business, including defence costs for regulatory investigations.

Contractors and subcontractors who fall outside your policy but are on your site, where the exposure runs to your public liability.

Injury to non-workers — visitors, customers, members of the public — which is public liability territory.

Where a broker fits

Not on the statutory placement. A broker will not ordinarily arrange a WorkCover Queensland accident insurance policy in the way they arrange liability, property or management liability cover.

The useful conversation is about everything around it: whether your worker classifications still hold, whether your cross-border arrangements match where your people actually work, whether business owners have any protection at all, whether employment practices and directors' exposures are covered, and whether the overall picture still matches a business that has grown since the covers were arranged.

Those are the gaps. In most cases, they're also the ones nobody has looked at.

Talk to us about your cover

If your workforce has changed, you engage contractors or labour hire, you have people working interstate or across the Tasman, or you have never checked what sits outside your WorkCover policy, Virtus can help you work through the commercial insurance issues relevant to your circumstances.

This article provides general information only and is not legal or personal advice. It does not take into account your objectives, financial situation or needs. Workers compensation obligations are set by legislation and administered by the relevant regulator. The availability and scope of any insurance cover depends on the terms, conditions, limits and exclusions of the relevant policy. Obtain appropriate legal and insurance advice for your circumstances.