19 September 2022
Running a business isn’t a walk in the park.
Each day, business owners are faced with a myriad of challenges. Some are predictable and others not so much. Having Employees adds another level of complexity. Managing Employees can be time consuming, it can be emotionally draining and it can take you away from your core business. Whilst we hate to say it, sometimes you need a safety blanket to fall back on if something goes wrong. It is worth considering whether or not you need Management Liability Insurance, to ensure that you are protected if someone alleged you had failed in your duties as a Director or manager?
If you are a Employer or a Manager, then you might not be aware of the plethora of regulations and laws in Australia that you must adhere to. Gosh as HR professionals we sometimes struggle to keep up. But in saying that, we understand how complicated they are. We advocate for compliance and adherence, but we’re also realists in the sense that we know you don’t intentional mean to do the wrong thing, it just inadvertently happens. The pace at which the regulations change is alarming.
Management Liability Insurance has progressed from the old Directors and Officers (D&O) cover. While this type of insurance is still around and has its place in certain organisations, Management Liability is a more flexible and comprehensive cover that provides coverage for Directors and Management as well as employees and senior management for financial loss where another party alleges breach of duty or misconduct.
There are usually multiple sections to a Management Liability Insurance policy. They consist of Directors and Officers cover, Employment Practices Liability, Crime (money and internal fraud) and Tax Audit cover.
When you think about it, and what potential claims could come your way, there might be things like harassment, unfair dismissal, bullying and occupational health and safety. Or you might be exposure to internal fraud, or the accountants cost of a tax or other regulatory audit if required. Another big consideration is fines and penalties for breaches of Workplace Safety regulations. These can be significant in terms of financial penalty but also the added cost of reputational lost.
Remember how we mentioned before the legislative requirements for business owners in Australia is complex? Enter the Corporations Act 2001. Every business within Australia has to work within this piece of legislation. So therefore any business in Australia can breach this legislation. So with a Management Liability Policy, you are not limited to your company size or reach, but your adherence to comply with the legislation.
To put it simply, all businesses should consider Management Liability in their insurance program.
In the HR space, the words Fair Work send chills down people’s spines. We understand that it can be daunting, but again, having a policy like Management Liability Insurance adds another level of protection to you and your business. It also can safeguard you from what you don’t know. Risk mitigation is an important factor in running your business.
Need to know more about how Management Liability insurance could work for you? Let us connect you with the right people. Email us at [email protected], or contact us here.
