Insurers are increasing excesses for worker-to-worker claims, according to industry experts.

Worker-to-worker claims arise when subcontractors and labour hire employees are injured at work, and the incidence of claims is rising due to the increasing use of labour hire.

This is most obvious through the growth in industries such as mining and construction, where labour hire arrangements are common and risk profiles are higher, Allianz spokesman Nicholas Scofield told insuranceNEWS.com.au.

He says state workers’ compensation authorities have also become more proactive in recovering claims as they try to harness all potential sources of revenue.

“Insurers have seen increasing numbers of claims,” he said. “As you would expect, that has flowed through to premiums, especially for companies that use a lot of labour hire.”

A QBE spokesman told insuranceNEWS.com.au he is “not surprised” that excesses are rising.

“Some insurers are more aware than others of the cost involved with worker-to-worker claims,” he told insuranceNEWS.com.au. “These insurers are able to react accordingly, either by increasing excesses or increasing prices.”

The spokesman says injured labour hire workers can choose whether to seek recompense through workers’ compensation or through suing the principal employer. The latter option is not available to permanent employees.

In most states, higher benefits and lower injury thresholds are available through civil liability than through workers’ compensation.

Injured workers can therefore go “forum shopping” to find the most lucrative avenue.

When injured subcontractors claim on workers’ compensation, the state authority pays the claim and then recovers the cost from the principal’s liability policy.

A 2010 Actuaries Australia paper said the number of worker-to-worker claims was increasing as a proportion of all bodily injury claims.

The increasing reliance on flexible employment such as labour hire and subcontractors largely explains the trend, the paper said.