Management liability insurance covers Toowoomba business owners and directors when a staff claim, fine or legal action lands on your desk. Sonia and Kallia find the policy that fits how your business runs.
Running a business in Toowoomba comes with real risk. Australian law puts heavy duties on directors and employers, and good intentions don’t always stop a claim.
A staff member alleges unfair dismissal. An employee takes money from the till. A regulator issues a fine. Any of these can cost thousands, even if you did nothing wrong.
Management liability insurance covers your business, and your own home and savings, against the cost of claims like these.
Many businesses think it won’t happen to them, but statistics show otherwise. In fact:
In one year, almost 2,000 people received compensation for workplace bullying in Australia.
(Australian Productivity Commission, 2019).
Unfair dismissal claims shot up 70% amid the Coronavirus Pandemic
(Fair Work Commission, 2020)
Average penalties awarded against companies & directors for WH&S breaches exceeds $62,000
(WH&S Statistics Report)
Allegations can be brought against company directors and officers for wrongdoing e.g. unfair dismissal, sexual harassment, bullying, a breach of WH&S, just to name a few. Irrespective of whether claims have any merit, legal defence is essential to protect your business. Legal expenses can fast amount to tens of thousands of dollars, even if you are not found liable.
Management Liability is designed to cover legal defence costs, Depending on your policy, it can cover legal defence costs whether a claim is proven or only alleged.
There are over 700 Commonwealth, State and Territory laws imposing personal liability on company directors in Australia. Maximum civil fines and penalties can reach up to $3.4M in serious circumstances costs.
There are a growing number of employee theft and fraud incidents, likely motivated by personal financial concerns and job security as a result of the Coronavirus pandemic. The average cost of an employee crime claim ranges between $80,000 – $100,000 (Dual, 2021).
Without Management Liability Insurance cover, there is a potential exposure to personal assets. If your business cannot afford to pay third party compensation or statutory fines and penalties, directors can be held personally liable. This puts your own personal assets at risk, for example your home or other valuable possessions.
The risks associated with managing a business do not just apply to large corporations. They apply to Toowoomba businesses of every size, from tradies and builders to cafés and family companies.
Interestingly, smaller businesses tend to experience a higher incidence of management liability claims compared to large organisations. This is because they generally have fewer resources to allocate to risk management activities.
Designed to cover claims for allegations against company directors or officers, including defence costs, settlements or civil penalties imposed. Wrongful acts may include a breach of duty or trust to a third party e.g. negligence, errors, omissions, or misleading statements.
Protection for the company for claims arising from alleged wrongful acts against the business by a third party.
Cover can include protection for claims such as a wrongful acts including fraud, shareholder disputes, environmental prosecution, breach of contract, tax audit and review costs.
Cover for a wide range of costs involved with superannuation fund disputes including investigation costs, mismanagement of funds, over payments, and exoneration costs.
Comprehensive crime coverage provides protection to the company for dishonest acts such as theft and fraud by employees, including theft of stock.
Cover can protect individuals and the entity against statutory fines and penalties for a breach of legislation in the course of operating the business. Cover includes defence and investigation costs.
Designed to cover the company, its directors, officers and employees for claims arising from employment practices e.g. harassment, discrimination, bullying, unfair dismissal and other employment issues.
Exclusions and the excess you need to pay can vary greatly depending on your insurer. Generally, your policy won’t cover:
A former employee claims they were wrongfully dismissed from your business because they were unwell at the time their position was terminated. They want to be reinstated to their role and remunerated for their loss of income while they were out of work. After numerous unsuccessful conciliation attempts, the matter is brought before a court and you have to pay damages to your former employee.
A Management Liability policy allows you to recover some or all of these costs so you can continue to run your business without having to sell your business or personal assets. Depending on your policy, you may be able to make a claim for your legal defence costs, as well as the amount paid to your former employee.
It is important to review and consider the Product Disclosure Statement (PDS) for full details on coverage.
For management liability advice from a local Toowoomba broker, contact All Star Brokers or call 07 4588 8876. Read what local clients say, or see our business insurance Toowoomba options.
Yes, if you have staff or a company structure. Staff disputes, fines and director claims hit small businesses too, and the legal bills alone can be large.
Public liability covers injury or property damage your business causes to others. Management liability covers claims about how the business is run, like staff disputes, fines and director decisions.
No. Professional indemnity insurance covers claims about the advice or services you give clients. Management liability covers how you manage the business.
It depends on your staff numbers, turnover, industry and claims history. Call 07 4588 8876 for a quote based on your business.
