SBDC warns on workers' comp for working directors

Small businesses seeking workers' compensation insurance cover for WA working directors of proprietary companies are advised to review their insurance needs according to the Small Business Development Corporation.
Changes to the legislation mean that workers' compensation cover for working directors remains optional, but that a new policy must be arranged if cover is required from 14 November 2005.
SBDC managing director, George Etrelezis recommends that those affected contact their insurance providers as soon as possible to make new arrangements.
"This will also provide a good opportunity for small business directors to reassess their insurance needs".
"Workers' compensation insurance cover remains important for many small business working directors" he said.
"On the other hand some working directors may consider that having life, trauma and income protection insurance is adequate protection and may choose not to have and pay for workers' compensation cover."
Mr Etrelezis went on to say that the new provision of a definition of the term working director overcomes the uncertainty that previously existed, when some small business directors were paying for cover, but told, when making a claim, that they were not considered to be a working director.
"Now, once a policy is in place, an insurer will not be able to deny liability on a technicality".
A working director in relation to a company, said Mr Etrelezis, is one who executes work for or on behalf of the company and whose earnings as a director of the company are in substance for personal manual labour or services.
Further information on the new rules on working directors is available from WorkCover WA's Infoline on 1300 794 744, from the Workers' Compensation Insurance Fact Sheet on the website www.workcover.wa.gov.au or from the SBDC.
For guidance on all aspects of operating a small business, contact the SBDC on 9220 0222, free call 1800 199 125 or visit the website at www.sbdc.com.au.
- The SBDC is funded by the Western Australian Government to deliver small business guidance throughout the State.
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