Management of a business necessitates a variety of obligations and hazards. In their management responsibilities, business owners, directors, senior managers, and board members are expected to adhere to many regulations. This makes them personally liable for various elements of business or company operations.
Certain obligations remain after a senior executive has left the company in question. Afterwards, these individuals removed from the position are judged personally accountable to have their legal bills removed from their assets. Management liability insurance aims to cover the cost of statutory liability fines and penalties for businesses and individuals who may find themselves in this scenario.
Here are the most important reasons to get business management liability insurance and what it covers:
1. Employment Practices Liability (EPL)
Employment practices liability refers to the risk that a business is liable for acts of workplace discrimination, wrongful termination, and harassment. If management personnel or a senior employee is personally held accountable by the courts, they may have to pay fines, penalties, and legal bills. The public relations implications of being found guilty of workplace discrimination are huge.
This covers claims that the business was negligent in hiring, failing to train, or firing an individual based on age, sex, race, or disability. Common examples of this are sexual harassment, wrongful termination, and discrimination in hiring.
2. Tax Audits and Investigations
The tax audits and investigations coverage protects your business against claims by the ATO that your business has committed fraud or has failed to file the proper information forms. This is especially important regarding sales tax, a complex matter that is not always clear to small businesses.
This is helpful if you are engaging in international business transactions. This kind of insurance will help you resolve any disputes that arise with the host country's government to maintain a smooth operation.
3. Crime Coverage
Employees who work for a management liability insurance company must report all criminal offences. If an employee fails to do so, the company is exposed to a potential fine or penalty. This is not just limited to reporting drug offences. All crimes must be reported to management or risk penalties.
Employees who commit a crime while working are often removed from the payroll pending investigation. The company's HR department frequently handles this.
If management liability insurance cannot prove that they are aware of the situation, they may be fined. On the other hand, the fines will be reduced or eliminated if the company can confirm that it follows the rules.
4. Workplace Health and Safety
As noted above, reporting all criminal offences is required. In addition, management liability insurance companies must adhere to all health and safety standards. They must also ensure that they manage every aspect of a worker's safety and wellbeing.
Doing so can help to control fines and penalties in the event of a workplace accident or injury. If your company is found to be negligent in this regard, you will be responsible for paying significant fines and penalties.
Conclusion
Managing a business is a demanding task. It takes a lot of planning, effort, and skill to make a company profitable. Having the right liability insurance can help you avoid fines and penalties and safeguard your business's future.
As can be seen, there are many potential risks for organisations of all sizes in their management. Liability insurance for control is a wise investment for every business. With good coverage, what could have been a severe financial burden can be eliminated.
Get business insurance in Gold Coast immediately. New Wave Insurance can help you choose the most suitable insurance to fit the needs of your growing business. Contact us today!