In Australia, safeguarding businesses against the risks of accidents resulting from management’s negligence is of utmost importance. Engaging with experienced professionals, such as Management or Public Liability insurance brokers, becomes crucial in this endeavor. These experts can provide invaluable insights and guidance to empower business further and ensure they have the right coverage in place. Taking such proactive steps can help businesses thrive with greater confidence in the face if unforeseen challenges.
How Much Money Businesses Lose Because of Risks
Based on a report published by the government, one in five Australian small businesses have been party to a dispute on average. Unfortunately for them, they have to experience a financial loss. Small-to-medium-sized enterprises are also at risk of unfair dismissal claims, with the Fair Work Commission listing at times with hefty costs.
But there is more; work-related injuries and diseases cost Australian companies $61.8 billion annually, according to Safe Work Australia. The amount of $6.3 billion from that reflects reduced productivity from their workers suffering from mental health issues.
Where does the buck stop? It’s with your company, and these risks could sink it. It’s prudent to ensure your managers, directors, and officers know the risks involved in their day-to-day work and its impacts.
The Risks That Management Faces
Risks are only a tiny portion of the 700-plus federal, state, and territory laws that govern owners, directors, and senior managers of businesses of any size. Liabilities include financials, regulatory compliance, employment practices, workplace conditions, and operations.
Some risks to consider are if one of your managers or directors acted illegally or unethically, causing losses to individuals, employees, or other businesses.
Moreover, allegations of management shortcomings may arise out of perceived gaps in response. These allegations may include poor communication with staff, failure to manage health and safety in the workplace, or breach of confidentiality and privacy. While there are claims key staff believe have no merit, they must still be defended.
For example, an employee of a food wholesaler had embezzled $400,000 by voiding invoices and moving the funds to their bank account. The company successfully claimed $430,000 to reimburse its lost funds under the crime provision of its management liability cover.
If that happened to your company, it didn’t have the right cover. Your business would take a hit, and the owners, directors, and managers are personally responsible. Personal assets such as home, savings, vehicle, or other valuables could be claimed to pay legal and other costs.
What Does a Management Liability Policy Cover?
A management liability policy protects your company and its directors, managers, and officers against claims and costs resulting from management’s mistakes. It focuses on breaches of their responsibilities under the Corporations Act. The kind of companies that need management liability insurance are typically businesses with employees or that operate in a regulated environment.
A management liability policy typically covers a range of business risks, including the following:
⦁ Stakeholders’ allegations of your company’s mismanagement
⦁ Workplace health and safety incidents and accidents
⦁ Employment malpractices such as unfair dismissal, harassment, or discrimination
⦁ Tax audits and investigations
⦁ Fraud and employee theft
⦁ Breach of contract defence costs
⦁ Environmental defence costs
⦁ Whistle-blower cover
⦁ Directors’ and officers’ management personal liabilities concerning the business, including run-off for retired directors
⦁ Statutory liability
There is a range of policies for private small-to-medium-sized companies, private micro-SMEs, sole traders, or partnerships. Coverage limits range from about $5 million down to about $100,000. You can even select extra cover for late-notified claims when you sign with a different insurer through Reliant Business Insurance’s management or public liability insurance broker.
You can even mix and match coverage types to ensure your package suits your needs, adding information technology insurance or professional indemnity insurance in Melbourne.
What Is Not Covered by Our Management Liability Policy Cover?
Management liability insurance is often confused with directors’ and officers’ insurance for large private or publicly listed companies.
The following is what management liability usually does not cover:
⦁ Incidents or claims the company knew about before signing up for the policy
⦁ Damage from or claims arising from intentional acts (by managers)
⦁ Accidental personal injury or property damage (public liability covers this)
⦁ Professional liability claims for negligence in your professional duty of care (professional indemnity covers this)
⦁ Claims made as a result of a data breach or cyber event (cyber insurance covers this)
⦁ Insolvent business, in particular cases
Turn to Reliant Business Insurance Today!
Call 03 8905 4753 or email info@reliantbi.com.au. You may also head to our website at www.reliantbusinessinsurance.com.au.