Laws making it illegal for insurance to cover workplace safety breach penalties have come into effect in NSW, making it the first state to introduce a change recommended in a national review.

The legislation, introduced by Better Regulation and Innovation minister Kevin Anderson, has been passed by the Legislative Council and became a law on June 10.

Prohibiting access to insurance for payment of fines was proposed in an independent review of national model work health and safety laws, which provide a basis for harmonising arrangements across states and territories.

Legal firm Gilchrist Connell says the insurance market has long sought to reduce incidences of reckless work health and safety conduct, mainly through exclusions denying cover where there has been wilful, deliberate or reckless conduct in breach of laws.

The NSW legislation doesn’t prohibit or restrict defence costs or legal fees from being subject to an insurance or indemnity arrangement.

“Additionally, it is still lawful to insure or indemnify against the legal and implementation costs of an enforceable undertaking,” Gilchrist Connell says.