Statutory Liability Cover - What you need to know

Statutory Liability Cover - What you need to know

Did you know that line supervisors and managers, as well as executives and directors can be found to be personally liable in addition to the company for breaching laws, such as the WHS law, the Heavy Vehicle National Law (Chain of Responsibility); Privacy Act; Corporations Act; Environment Protection Act; & Fair Work Act?

The maximum penalties, depending on your State or Territory, are up to 25 years jail plus $350,000 in fines & penalties.

This is where Statutory Liability can help by paying the legal costs and expenses both during the investigation process and at any subsequent civil or criminal court proceedings.

This insurance is available to many industries, from transport to oil & gas, to manufacturing, tourism, warehousing & distribution and building & construction.

What is Statutory Liability Cover?

Statutory Liability Insurance is a specialist type of insurance. While all Statutory Liability policies cover legal defence costs during an investigation and any subsequent civil or criminal court cases, policies can also include cover for the cost of enforceable undertakings, in addition to any fines and penalties imposed. So, it’s important to know what type of insurance cover you have and ensure its tailored for you and the industry and the State or Territory your business operates in.

Some Management Liability and D&O insurance policies can provide cover for legal costs and fines due to breaches of laws. However, it’s worth checking to see how much cover is in place, also if there are special exclusions related to pollution or environmental damage that a specialists Statutory Liability policy would cover. Some typical examples of exclusions in a Statutory Liability policy include, gross negligence or recklessness, deliberate or intentional acts.

What risks are faced by senior executives and directors?

As shown above, penalties and fines for breaching a variety of laws can be severe, so it’s important that senior managers and directors have policies and procedures in place to ensure that the company and employees comply with all relevant legislation. An oversight by an employee or a contractor resulting in a serious near miss or death, is likely to trigger an investigation or inquiry and potentially legal action by a regulator. If you’re facing an industrial death investigation on a construction site in the ACT, QLD or Victoria and up to 25 years jail, you want to make sure you have the right insurance in place, to pay for legal fees to represent you both during the investigation and any trial. As the time between the investigation and final legal decision is likely to be years, legal fees can quickly add up.

A typical Statutory Liability policy will respond to breaches of laws such as, inadvertent pollution of local river by a truck that overturns, unsafe work practices, accidental passing on of personal information, and any other incident relating to the more than 5000 laws or regulations.   

Obviously, your risks will be dependent on your business and the industry you operate in, as not all laws will be relevant to you. So it’s worth talking to a professional insurance advisor about Statutory Liability insurance to ensure you and your management have the best cover.

How can Statutory Liability Cover help?

This type of insurance is essential for managers at any level, executives and directors in all industries, including manufacturing, engineering, construction, transport & logistics, retail, hospitality and tourism industries.

The problem is that if something goes wrong and you’re the manager or decision maker responsible, then you can be personally held responsible. That’s why you and the business need a comprehensive Statutory Liability insurance cover.

To decide whether Statutory Liability Insurance is suitable for your situation, talk to an insurance professional today and find your local adviser.

Important Information

This communication including any weblinks or attachments is for information purposes only. It is not a recommendation or opinion, your personal or individual objectives, financial situation or needs have not been taken into account. This communication is not intended to constitute personal advice. This type of insurance product is designed for small and large businesses, who want directors, managers and their business to be covered against financial loss, including personal financial loss and penalties, from operating and managing a business.

We strongly recommend that you consider the suitability of this information, in respect of your own personal objectives, financial situation and needs before acting on it. This document is also not a Product Disclosure Statement (PDS) or a policy wording, nor is it a summary of a particular product’s features or terms of any insurance product. If you are interested in discussing this information or acquiring an insurance product, you should contact your insurance adviser to obtain and carefully consider any relevant PDS or policy wording before deciding whether to purchase any insurance product.

Directors & Officers/Management Liability Insurance

Directors & Officers/Management Liability Insurance

Many small and medium-sized business owners think they don’t need Directors & Officers (D&O) Insurance as it’s only relevant to large multi-national companies. However, D&O insurance is just as important to SME’s as any other business.

Professional Indemnity Insurance

Professional Indemnity Insurance

Professional Indemnity (PI) Insurance isn’t just limited to typical ‘professions’ such as accountants, engineers, lawyers, doctors and architects. Essentially, anybody providing advice or consultancy services for a fee has an exposure that needs to be considered.

Find your local Insurance Adviser

Talk to your local Adviser to get advice about your insurance needs and to get a quote