Exclusions in insurance policies are those events, occurrences or types of damage or loss not covered by a policy.  Exclusions can vary from one insurance policy to another. An incorporated association should pay special attention to any exclusions when considering the type and extent of cover. 

Some examples of common exclusions are:

• workers' compensation and professional indemnity cover may not extend to volunteers;
• the loss of cash kept on premises may not be covered;
• items valued over a certain amount may not be covered; and
• the use of private cars for work purposes may not be covered under the owner's private car insurance.

 ‘Risk management’ is a formal and structured process of identifying and managing risk.  It involves assessing and then actively managing an organisation’s potential exposure to loss, damage or litigation. Effective practical strategies for reducing risk, such as safety protocols and security devices, can work together with insurance to reduce risk exposure. 

Basic risk management steps

1. Identify each risk with a thorough analysis of the association's operations, activities and business. 
2. The association needs to decide how to manage risks by determining the likelihood of a risk occurring against the potential consequences.  For example, an association may choose to remove the risk by not continuing with a particular activity, or determine that existing control is satisfactory as the impact would be very minor and it is extremely unlikely to occur.
3. Treat risks by considering any existing risk control measures (eg insurance, security alarm, warning signs), deciding whether the existing measures are adequate and considering any additional measures that may be required.
4. Monitor and review the process on a regular basis.  It is important to regularly review if there has been any change in the association's risk position and, if necessary, repeat and review the process set out above.

Becoming incorporated does not mean an association is automatically protected from exposure to risk. There are various reasons to obtain insurance:

• compulsory insurance requirements imposed by law (e.g. worker compensation);
• the association may have property or other assets that should also be insured;
• the association organises or participates in activities that require suitable insurance (e.g. sporting activities) or
• members, executives, staff and volunteers may need to be insured against certain risks or personal liability that may arise as a result of their role in the association.

The following are common types of insurance that may be relevant to associations.

• Professional indemnity - covers claims in respect of a breach of duty.
• Portable/ valuable items - covers loss of specified items.
• Theft - to cover theft of contents, cash and stock.
• Events insurance - covers an event against loss (e.g. cancellation due to bad weather).
• Workers' compensation - covers employees for work related injuries.
• Public liability insurance - covers claims by third parties; e.g. negligence
• Directors’ and officers’ liability- covers the directors and officers against legal liability.
• Volunteer insurance - covers volunteers for personal injury and public liability.
• Building insurance - covers against events such as fire, storm and vandalism.

Compulsory insurance

Some insurance cover is compulsory under applicable laws. For example, it is compulsory for an incorporated association that employs staff to have workers' compensation insurance. An association should consult a qualified adviser (such as an insurance broker or lawyer) to determine its compulsory insurance obligations.

An association should consider the cost of any non-compulsory insurance against the risks covered by that insurance in the context of the activities carried out by the association. The committee may wish to engage a qualified broker to assist it to identify suitable insurance cover.  A review of the association’s activities and risks should be conducted on a regular basis to assess whether its existing insurance program provides appropriate cover.

Exclusions

Exclusions in insurance policies are those events, occurrences or types of damage or loss not covered by a policy. For example:

• workers' compensation and professional indemnity cover may not extend to volunteers;
• the loss of cash kept on premises may not be covered;
• items valued over a certain amount may not be covered; and
• the use of private cars for work purposes may not be covered under the owner's private car insurance.

Exclusions can vary between policies and an association should pay special attention to any exclusions when considering the type and extent of cover. 

Hints when considering insurance and risks

• Obtain professional advice and assistance from a qualified insurance broker.
• Investigate group insurance schemes, which may reduce premium costs.
• Regularly check insurance cover and policies to ensure that you are not under‑insured or over-insured.
• Consolidate policies where possible – packaged insurance may be more cost effective than individual cover.
• Undertake regular risk management to identify, assess and manage risks.
• Ensure that all office bearers, committee members, management and staff are aware of their legal responsibilities.
• Ensure that relevant policies and procedures concerning risks (e.g. professional standards and health and safety) are developed, implemented and maintained.

The Work Health and Safety Act 2020 (WHS Act) and its associated Regulations (collectively referred to as the WHS Laws) commenced on 31 March 2022 and sets out the requirements for providing a safe and healthy work environment.

If an association’s activities are covered by the WHS Act it must ensure the health and safety of all of its workers, including volunteers and members. This means that the organisation must provide the same protections to its volunteers and members as it does to its paid workers.

The protection covers their physical safety and mental health.

What activities are covered by the WHS Laws?

Only work activities are covered; activities that are purely domestic, social, recreational or private in nature are not included. Whether an activity is considered work may depend on specific circumstances.

Examples of activities that are considered work include:

• maintenance of the things needed to enable an organisation to carry out its work. For example, maintenance work on a hall where a volunteer group meets
• activities that people are ordinarily paid to do but are carried out for the organisation by a volunteer, for instance, driving clients to appointments
• activities that the organisation has a great degree of direction or influence over, or
• activities carried out in accordance with formal or structured arrangements.

For more information on what is and is not ‘work’ under the WHS Act, please contact Worksafe.

Associations and their duties under the WHS Laws

An association will have duties under the WHS Act where one or more persons are employed to carry out work for the association. A person may be employed by either:

• the organisation itself
• the organisation’s members, whether alone or jointly with any other members.

The association will owe a duty to both the paid worker and any volunteers it (or its members) engages.

The WHS Act does not apply if the association is a group of volunteers working together for a community purpose and the association does not employ a person to carry out any work for the association.

The primary duty of an association under WHS Laws includes ensuring:

• the provision and maintenance of a work environment without risks to health and safety
• the provision and maintenance of safe plant and structures and safe systems of work
• the safe use, handling and storage of plant, structures and substances
• the provision of accessible and adequate facilities for the welfare at work of workers, including volunteers, for example, toilets, first aid facilities
• the provision of information, training and instruction or supervision that is necessary to protect all persons from risks to their health and safety arising from their work.

The WorkSafe division of the Department of Energy, Mines, Industry Regulation and Safety administers the WHS Laws and can provide further information. WorkSafe can investigate breaches under the WHS Laws. Inspectors have broad powers to visit and inspect workplaces and it is an offence to interfere in the performance of an inspector's functions.

Worksafe

Telephone 1300 307 877 

24 hour serious incident and fatality reporting line: 1800 678 198

Website www.demirs.wa.gov.au/worksafe

Reporting accidents

All accidents and near misses should be reported in writing to the employer (the association) as soon as possible. The report should set out all the relevant details of the accident.

The WorkSafe Commissioner must be notified of all work related injuries that result in a death or fracture of the skull, spine, pelvis, certain bones in the arm or the leg, some types of amputations, the loss of sight in an eye or an injury that, in the opinion of a medical practitioner, is likely to prevent the employee from being able to work within ten days of when the injury occurred. Further information is available from the WorkSafe website.

In Western Australia, all workers must be covered by a valid workers’ compensation insurance policy. The definition of a ‘worker’ is broad and extends to any ‘contract of service’ or ‘contract for service’ between a worker and employer. If an association is unsure whether its staff are classified as ‘workers’ or ‘volunteers,’ it should contact its insurer or insurance broker to confirm the organisation has the right coverage.

WorkCover WA is the government agency responsible for overseeing and regulating the workers’ compensation and injury management scheme in WA. For more information visit the WorkCover WA website or telephone 1300 570 937.

Many sports and recreational activities have inherent risks and dangers.  It is inevitable that injuries amongst participants will occur.  Negligence can lead to participants, officials, or the association being held liable (responsible) for conduct that causes harm to another person.  

Participants

Participants are generally taken to have voluntarily accepted the risks inherent in a particular sport.  This includes the risk of injury that might arise from minor or expected breaches of the playing rules; however participants are expected to behave reasonably.  If the person's behaviour falls below the standard required, the person may be said to be negligent.  

Coaches and referees

Coaches and referees owe a duty of care to participants in sports activities.  They are expected to do what a reasonably competent coach or referee would do in that position including providing reasonable supervision and ensuring that participants are properly instructed in the rules of the activity and safety requirements.  

Spectators

Spectators and bystanders are also exposed to risks at sporting events.  Spectators and bystanders could be injured in a variety of ways such as by stray balls, racing cars leaving the track and crashing into the spectator area, faulty equipment, grandstands collapsing and unruly behaviour.

A sports association, officials and participants have a duty to take reasonable care not to injure or cause injury to spectators or bystanders. A sporting association may be held liable for injuries to spectators if they failed to take reasonable steps to prevent foreseeable risks.  

Effect of the Civil Liability Act 2002

In Western Australia, the Civil Liability Act 2002 (CLA) limits liability for injury resulting from recreational activities.  A person is not liable for harm occurring as a result of an inherent risk, such as something that cannot be avoided by exercising reasonable care and skill. 

If a risk is obvious, there is no duty to warn a person of the obvious risk.  For example boxers can expect to get punched. However, a person will not avoid liability if the injured person had specifically asked for advice about the risks.

Insurance and waivers

Sporting groups can obtain insurance specifically designed to cover sports injuries, liabilities and events. Participants, members and officials should be informed of the nature and extent of the insurance cover and participants should be advised to have their own health cover.

It is not uncommon for sporting associations to require members to sign a waiver that indemnifies the association and its officials from liability.  Waivers have limited value and in the case of children, parents may not sign away children's rights against negligent acts.    

Department of Local Government, Sport and Cultural Industries - Sport and Recreation

The Department of Local Government, Sport and Cultural Industries - Sport and Recreation has a useful website that provides information about managing sport and recreation clubs.

Postal address: PO Box 8349 Perth Business Centre WA 6849
Telephone: (08) 9492 9700
Email: www.dsr.wa.gov.au/contact
Website: www.dsr.wa.gov.au