Great question and one we get asked a lot. The reason most of us have personal or business insurance is to mitigate risk, and, in some cases, because it’s a requirement of doing business.

For example, it is compulsory for a business who employs staff to have workers compensation insurance. There may also be obligations imposed on us by contractual arrangements or by a regulator. Such is the case for businesses who are registered with the NDIS.

The NDIS Practice Standards require registered NDIS providers to have:

• Professional liability insurance
• Public liability insurance
• Accident insurance

For businesses this accident insurance comes under the compulsory workers compensation. For sole traders, it’s a bit different. Sole traders do not need to have a workers compensation insurance policy. However, the NDIS requires that registered sole traders have personal accident insurance (income protection) instead. Why? As a sole trader, you are not classified as an employee, so you are not covered by workers compensation. So, what happens if you are injured and cannot work? This is where your personal accident insurance will step in and cover your lost wages (or a percentage of).

Let’s take a look at what those insurances cover, as well as some other common business insurances.

Types of insurance

Professional liability insurance covers claims for costs incurred as a result of the advice or services you have provided.

For example, if you are a Support Coordinator, and a participant alleges that due to information you have given them they have to repay money to the NDIS, and they are seeking to claim this money back from you.

Public liability covers claims for costs of injury or property damage caused because of negligence, including in the course of work completed by your organisation, actions of an employee, or at your premises.

Claims can be made by anyone other than employees, including participants, visitors, and volunteers.

For example, a person comes in to have a meeting with you. The air conditioner has leaked, and as the office floor is wet, they slip and break their leg. The person could put in a claim for losses incurred because of the injury, such as loss of income and medical expenses.

You can also have a situation where the person is covered under their own personal accident insurance or their employers’ workers compensation insurance and then their insurer claims recovery from your public liability insurance. For example, a worker, who is employed by a labour hire agency, seriously injured themselves and claims under the agency’s workers compensation insurance. On investigation it is found that the incident was as a result of negligence and the worksite was unsafe. The insurer then has grounds to claim costs back under your public liability insurance.

Workers compensation insurance covers the cost of lost wages, medical and other related expenses of employees who suffer a work-related injury or illness.

So, if rather than a visitor, it was an employee who slipped on the wet floor, then they would be covered by this insurance policy.

Workers Compensation is legislated by each state and territory and the cover provided varies across the country. Therefore, if you have employees working in more than one state/territory it can get a little more complicated.

• If the employee(s) works across two states or territories - for example you are located in a border town, then you will only need the one policy. The policy will be taken out in the state/territory that the employee(s) primarily works or is based. If it is not clear where this is (such as if an employee does 50% on each side of the border) then it would be based on where the employer, or office, is located.
• If you have a separate division of your company based in another state/territory, for example you have an office in Brisbane and one in Tasmania, then you must have a separate policy for each state/territory.

Physical and sexual abuse insurance covers the costs arising from lawsuits resulting from physical or sexual abuse committed by one of your employees, a volunteer or other person associated with your organisation.

You will need to confirm with your insurer that you can actually obtain this insurance as it is becoming increasingly hard for some providers to obtain coverage, as raised by DSC’s Rob Woolley in a 2021 article.

Directors’ and officers’ insurance covers the cost of claims made against the people or roles listed in the policy. This insurance is taken out to indemnify people who hold senior management and directors’ roles.

It is essential to read and understand what inclusions and exclusions apply to your policy, including who is actually covered. Exclusions may include things such as if the person acted dishonestly, was fraudulent or failed to take reasonable precautions to avoid the situation occurring.

An example of when directors and officers’ insurance may be used is if a serious incident occurred which resulted in a participant suing the CEO and the directors personally. The insurance would cover any damages and compensation awarded against them.

Employment practices liability insurance covers the legal costs if an employee files a lawsuit due to harassment, discrimination, or wrongful termination.

For example, if an employee claims that they were sexually harassed by a colleague. The insurance covers things such as lawyer’s fees, settlement money, and administrative expenses but not the cost of criminal fines.

Business contents insurance covers the cost of replacing or repairing damaged or stolen contents in your workplace. It includes things such as fit outs, fittings, equipment, machinery, records, and other documentation etc.

It generally does not include the building itself, cash, vehicles and general wear, tear, and equipment breakdown.

Confirm any inclusions and exclusions with your insurer.

General property / tools of the trade insurance cover the cost of replacing or repairing transportable equipment and tools which have been lost, accidentally damaged or stolen. The property is covered if it is at or away from the normal workplace. But this type of insurance does not cover vehicles.

Vehicle insurance covers the cost of repairing or replacing a vehicle which is damaged or stolen, along with any tools which were inside the vehicle at the time.

This insurance also covers the costs of third-party property damage.

As you can see there are a lot of insurance options, and these are just some of the common ones. You may want to consider other more specific insurance coverage based on your work and what you want to cover.

What if I am an unregistered provider?

The NDIS does not stipulate that unregistered providers have specific insurance coverage, however if you employ people, you will still be required to have workers compensation insurance.

Check what other non-NDIS related obligations you may have. For example, if you do home modifications you may require home warranty insurance.

Information for participants’

If you are a participant and employ your own workers, then you will be required to have workers compensation insurance.

You may also consider taking out public liability insurance to cover any potential claims by people who support you in your home, irrespective of if they are your employees or not.

If you are being supported by a self-employed worker(s), you may request that they provide their own personal accident insurance, public liability, and professional indemnity insurance.

Further information

The information provided in this article is general in nature only and not intended as professional or legal advice.

Talk to your insurer or insurance broker for specific advice relating to insurance coverage.

You may also like to check out the compliance requirements set out by the NDIS, including the NDIS Practice Standards and Quality Indicators -  NDIS practice standards | NDIS Quality and Safeguards Commission (ndiscommission.gov.au)

Do you have a question that you want answered by one of our NDIS whizkids? Submit them here.