Getting your first policy right

What is complicated is the three things you have to work out before anyone can price it, and a new business usually works them out in an afternoon under time pressure, from a form.

One, what you will actually declare

Your premium is your declared remuneration multiplied by a rate, so the first number matters.

Remuneration is not the gross figure on a payroll report. It includes allowances, overtime, the grossed up taxable value of fringe benefits, salary sacrificed superannuation, and the labour component of payments to contractors who meet the definition of a worker. It excludes compulsory superannuation, redundancy pay and payments in lieu of notice. What counts as remuneration

For a new business this is an estimate, because nothing has been paid yet. Make it a genuine best estimate rather than a cautious one. The difference between your estimate and what you actually pay is adjusted at the end of the period, and the adjustment lands on you. An estimate set low does not save money, it defers it and adds a bill you did not plan for.

Two, which industry class you are in

The class sets the rate the whole calculation starts from, and on the 2026/27 recommended rates the schedule runs from 0.25% of remuneration to 6.56%.

It is decided by your predominant business activity, which the Industry Classification Order defines as the activity with the largest aggregate remuneration paid to workers over the policy period. Measured in wages. Not revenue, not headcount, not what the business is called.

At inception you are describing a business that has not run yet, so you are estimating the wages split too. Get it as close as you can, because the class assigned now is the one that carries forward until somebody tests it, and in most businesses nobody ever does. Is your classification right?

If you place workers with host businesses, stop here and read this instead, because a different rule applies to you entirely and it is the one most new labour hire companies do not know about. How labour hire classification works

Three, whether the directors are covered

This is the one that cannot be fixed afterwards, so it is the one to get right first.

In Western Australia, covering a working director is optional. A working director is covered only if they are named on the policy and their remuneration is declared to the insurer, at inception and again at each renewal.

To be covered, a working director has to be a director under the Corporations Act 2001, do work for the company, and receive remuneration that is in substance for their personal labour or services. Non working directors, sole traders, partnerships and unincorporated business owners are outside it.

Two things to be blunt about.

Cover cannot be created after an injury. It exists only where the naming and the declaring happened at the time.

The amount matters, not just the naming. The Guidelines' own worked example is a company that names its working director and declares nil remuneration for them. No income compensation is payable, because the company declared the director receives no earnings.

And a working director's remuneration is broader than payroll. Fees, wages, salary, allowances, fringe benefits and trust distributions all count where they are paid in return for labour or service. The route the money takes does not settle it.

What happens next, and how long it takes

Once you ask an insurer for a quote, they must provide a written quote of the premium determined for your industry classification, inclusive of full terms, within 14 days of receiving the request.

If you are being asked for anything beyond that, such as an accountant's declaration certifying your labour hire wages, that is an underwriting requirement of that particular insurer rather than a rule of the scheme, and it is worth understanding before you sign it. The labour hire wage declaration

After the first year

Both numbers come back. An estimate for the year ahead and an actual for the year just finished, every year, and the answers move as your business does. The annual cycle

What we do, and what we do not

We work out the three things above and give you the figures with the reasoning behind them, so the declaration you lodge is defensible and the class you are assigned is the right one from the start. Doing it at inception is much cheaper than unwinding it in year three.

What we do not do. We do not sell insurance, we are not brokers, and we do not advise on which insurer or policy to choose or arrange cover for you. If you need a broker, find one. What we do is the part that sits underneath whatever policy you end up with.

Fees are fixed, agreed in writing before any work starts, and never a percentage of anything.