Workers compensation is a state or territory-based scheme that covers eligible workers for work-related injury or illness. Employers are generally required to arrange it. Group personal accident and sickness insurance is a separate, optional private policy. It may provide agreed benefits for covered injury or sickness, including events outside work, based on the policy terms.
The two policies have different legal triggers and benefit structures. Workers compensation is the statutory starting point for eligible workers with work-related claims. Group personal accident cover sits alongside it, not instead of it.
Read more - Is workers compensation insurance compulsory in Australia?
At a glance
- Workers compensation generally covers eligible workers for work-related injury or illness under state or territory law
- Group personal accident and sickness (GPA) is an optional private policy that may cover injury and, where chosen, sickness
- GPA can apply outside work hours, but the cover period depends on the policy
- A business may consider both where employees, directors, contractors, volunteers or members have different coverage needs
- GPA does not replace workers compensation where workers compensation is legally required
Group personal accident vs workers compensation: key differences
| Feature |
Workers compensation |
Group personal accident and sickness |
| Main purpose |
State-based benefits for work-related injury or illness |
Policy-defined benefits for covered injury or sickness |
| Legal status |
Generally required for employers with eligible workers |
Optional |
| Claim trigger |
Injury or illness connected with work under the relevant scheme |
Covered accident or sickness under the policy terms |
| Cover period |
Work-related events recognised by the scheme |
May be work-hours only, journey-related or 24/7 based on the policy |
| Who may be covered |
Workers who meet the state's definition |
Employees, directors, contractors, volunteers or members where accepted |
| Weekly payments |
Wage-related payments set by state rules |
Agreed weekly benefits, subject to waiting periods and limits |
| Medical costs |
Treatment and rehab under the relevant scheme |
Only where included, subject to policy limits |
| Sickness |
Work-related illness may be covered |
May be included where sickness cover is chosen |
| Lump-sum benefits |
May include impairment or death benefits set by the scheme |
May include accidental death or lasting disability benefits |
| Waiting period |
Set by scheme rules |
Policy-defined excess or waiting period |
| Cost basis |
Wages, industry class, state rules and claims history |
Group size, job types, benefits, cover period and claims history |
When each policy may or may not respond
These scenarios are illustrative only. All claims are subject to the relevant scheme rules or policy terms.
| Scenario |
Workers compensation |
GPA |
Why |
| Employee slips at work and breaks a wrist |
May respond (work-related injury) |
May also respond, but offsets may apply |
Both may cover the person, but WC is the primary response for work injuries |
| Same employee breaks an arm cycling on the weekend |
Generally would not respond |
May respond where 24/7 cover is chosen |
The injury isn't work-related, so WC has no trigger. GPA may fill the gap. |
| Working director is injured on a farm or site |
May not respond (director status varies by state) |
May respond where the director is listed on the policy |
Directors are often outside the WC scheme. GPA can cover them. |
| Volunteer is injured at a community event |
Generally would not respond (no employment relationship) |
May respond where volunteers are accepted under the policy |
Volunteers usually sit outside WC. GPA or voluntary-worker cover fills the gap. |
| Employee develops hearing loss from years of work noise |
May respond (occupational illness) |
Usually would not respond (GPA is typically injury-focused) |
WC covers work-caused illness. GPA covers accidents, not gradual conditions. |
| Contractor is injured on a client site |
Depends on whether the contractor is deemed a worker |
May respond where the contractor group is accepted |
Legal status determines which policy applies. Check before assuming. |
The table shows why both policies complement rather than compete. Workers compensation responds to work-related events for eligible workers. GPA may respond to the people, hours and events that workers compensation doesn't reach.
When is workers compensation required?
It's generally required where a business employs workers covered by the relevant state or territory scheme. That includes full-time, part-time, casual and apprentice staff. Some contractors may also be treated as workers based on the actual arrangement, not the label in the contract.
Employers that fail to arrange required workers compensation may face significant penalties or prosecution under the relevant state's rules. Requirements vary by state and territory. Where the law requires the business to insure eligible workers, GPA cannot be used instead.
When may group personal accident and sickness insurance help?
GPA fills gaps that workers compensation doesn't reach.
- Directors and owners. A working director's workers compensation status varies by state and how they are engaged and paid. Where the director is not covered by the relevant scheme, GPA may provide income cover.
- Volunteers. Volunteers are not automatically treated as employees under every workers compensation scheme. GPA or a voluntary-worker policy may be relevant where statutory protection does not apply.
- Off-duty cover for employees. GPA may respond to injuries outside work hours where an off-duty or 24/7 cover period is chosen under the policy.
- Contractors. GPA may be arranged for accepted contractor groups, subject to insurer eligibility, occupation and policy terms.
- Enterprise and contract needs. Some enterprise agreements, client contracts or workplace arrangements may require additional accident cover alongside workers compensation.
How the two policies work together
Workers compensation and GPA are not competing products. They cover different sides of the same problem: what happens when someone connected to the business is injured.
Workers compensation covers the eligible worker at work. GPA can extend protection to directors who sit outside the state scheme, volunteers who aren't employees, staff who are injured off duty, and contractors whose status doesn't trigger workers compensation. Where both respond to the same event, the GPA wording may include offset, coordination or repayment clauses. Benefits may also be limited by earnings, waiting periods and maximum benefit periods.
A business that holds workers compensation and GPA together isn't doubling up. It's closing the gaps that one policy alone can't reach.
Common coverage gaps and exclusions
Workers compensation may not respond to:
- ordinary injuries or illnesses with no sufficient connection to work
- people who do not meet the relevant worker definition
- benefits outside the statutory scheme
- some journeys or activities, depending on the state
GPA may not respond to:
- sickness where sickness cover is not chosen
- claims during the waiting period
- excluded sports or hazardous activities
- pre-existing conditions, depending on the wording
- benefits above the agreed weekly limit or maximum benefit period
- claims affected by workers compensation or other income offsets
How do the costs differ?
Workers compensation premiums generally depend on the state, wages, industry class and claims history. In some states, the regulator sets rates. In others, they can be negotiated. GPA premiums may depend on the number and job types of covered people, whether cover applies during work hours or 24/7, weekly benefit levels, waiting periods, sickness cover and capital benefits.
The two are priced differently because they cover different risks.
Which cover may suit your business?
Swipe left or right to see the full table.
Three details to check before choosing cover
1. Who are you covering? Employees, sole traders, contractors, directors, volunteers and members all have different legal status. Confirm the legal relationship before choosing the policy.
2. Did the injury or illness arise from work? If yes, workers compensation is the starting point for eligible workers. If not, or if the person isn't covered by the scheme, GPA may be relevant.
3. Which state or territory applies? Workers compensation is governed separately in each state. Who counts as a worker, what benefits apply and which insurers are approved all vary. Check with your local regulator.
How upcover can help
upcover arranges workers compensation insurance and group personal accident and sickness insurance for eligible Australian businesses. The right option depends on your workforce, state or territory, job types and the cover required.
- 70,000+ businesses covered across Australia
- 4.9/5 customer rating
- 80+ insurance partners
Get a workers compensation quote through upcover
Get a group personal accident quote through upcover
upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078.
Frequently asked questions
Is group personal accident the same as workers compensation?
No. Group personal accident is an optional private policy arranged through an insurer or broker. Workers compensation is a state-based scheme that employers are generally required to hold for eligible workers. They serve different purposes.
Can group personal accident replace workers compensation?
No. Where workers compensation is legally required, a GPA policy does not meet that obligation. GPA can sit alongside workers compensation but not instead of it.
Does group personal accident cover injuries outside work?
It may, where 24/7 or off-duty cover is chosen under the policy. Not every GPA policy covers events outside work hours. Check the cover period in the policy wording.
Does group personal accident cover sickness?
It may, where sickness cover is chosen alongside injury cover. Sickness is not always included by default. Confirm it's part of the policy if it matters to your business.
Are contractors covered by workers compensation?
They may be. Whether a contractor is treated as a worker depends on the state and the actual working arrangement, not the label in the contract. Check before assuming they're excluded.
Are volunteers covered by workers compensation?
Not always. Volunteers are not automatically treated as employees under every scheme. GPA or a voluntary-worker accident policy may be relevant where statutory protection does not apply.
Can both policies pay for the same injury?
They can both respond, but the GPA policy may include offset, coordination or repayment clauses where other benefits are payable. The GPA payout could be reduced by the amount received under workers compensation.
Does workers compensation cover travel to and from work?
It depends on the state and the circumstances. Journey and commuting claims vary between schemes. GPA may respond to a commuting accident where the chosen cover period and policy terms apply.
The information in this article has been prepared without taking into account your individual needs, objectives or financial situation. It should not be relied upon as personal advice. Workers compensation rules, benefits and obligations vary by state and territory. All insurance products arranged through upcover are subject to the terms, conditions, limits and exclusions contained in the relevant policy wording and Product Disclosure Statement. Before deciding whether a particular insurance product is right for you, please read the relevant PDS and consider your personal circumstances. upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.
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