Management Liability Insurance
The responsibilities of operating a business have never been greater.
Management Liability insurance is designed to insure legal costs & fines/penalties arising out of actual or alleged mismanagement of a company. Some of the most common claims we see arise from breaches of Workplace Health Safety, Employment Practices and Employee Crime.
1. Workplace Health Safety (WHS)
The maximum fines &/or penalties for a breach of WHS are $600,000 per person or 5 years imprisonment, or both. Your company can also be fined up to $3,000,000 per offence.
Workplace accidents do & will happen, and the workplace regulators are extremely well funded and vigilant. We have noticed a significant increase in the frequency & severity of WHS claims in recent times.
Whether you have 1 employee or 100, you have a very real exposure to prosecution in the event of a workplace injury.
2. Employment Practices
We frequently assist clients in the defence of claims of unfair dismissal and harassment. Even if you follow all the guidelines and obtain professional advice you cannot prevent an employee from referring the matter to the Fair Work Commission for review.
Claims are typically in the range of $10,000 to $50,000 and these matters are often very personal and a significant distraction to the operation of your business. An appropriate Management Liability policy will allow you to engage specialist legal counsel so you receive the best representation, cover any claims for compensation ordered against you, and to bring the matter to a speedy conclusion.
3. Employee Crime
It is far more likely that you will experience theft by an employee, than you will of a break-in at home.
Internet banking and the ability to transfer funds with minimal effort & security is leading to increased levels of employee theft. In addition to money, theft of stock, plant & material is also common.
We have experienced claims of employee theft ranging from $5,000 through to $175,000. The thefts are often small amounts taken over of a long period of time that go unnoticed.
Management Liability will cover the cost to investigate, and the reimbursement of the amounts stolen.
Can you risk not having Management Liability insurance?
The common mindset is to insure vehicles & mobile phones without much thought. However, the loss of these assets is not likely to be a business-ending event. A Workplace Health Safety claim could be.
The average cost of a Management Liability policy is in the range of $750 to $2,000 per annum.
We would highly recommend you include an appropriate Management Liability policy in your Insurance Program and look forward to your instructions to obtain quotations for further consideration.
