Employment Practices Liability, Management Liability
Business Insurance – what is covered
Business insurance covers losses or damages to your property perils like fire, theft and accident.
It also provides protection from liability claims and other legal liabilities arising due to the death of an employee or any damage caused by his/her actions.
If you employ people in your business, it is compulsory that you have a workers compensation scheme for them.
The employer must provide compensation to the injured party if he causes any injury while on duty or performing a task assigned to him.
This can include medical expenses as well as pay lost during recovery time.
As an employer, you may also need to buy a policy that protects your business against claims of discrimination in the workplace. This includes sex and race related discrimination often know as Management Liability Insurance.
The insurance will cover any legal costs incurred due to these types of lawsuits as well as pay damages awarded.
Insurance examples for small business
Business Insurance Example 1:
Insurance covers damage to another object or person’s property caused by you. Insurance covers loss of money in your safe as a result of fire, burglary or any other vital reasons.
Insurance provides compensation for any legal costs that may arise due to disputes with another person over the ownership or delivery of items you sell/provide, etc.
Business Insurance Example 2
Insurance would cover the cost of goods lost due to fire, flood, theft and vandalism.
It also covers legal liability claims made by third parties against your business. What they need to prove is that your actions have caused them some financial loss because they suffered a physical injury or death. An example is when you accidentally injure a customer when he visits your shop; it’s highly likely that his family will sue you for damages like medical expenses and loss of income if they are breadwinners.
Business Insurance Example 3:
This policy will cover any legal costs incurred if an accident occurs due to negligence by you as an employer during the course of employment like faulty equipment used by an employee while performing a task assigned to him. It also covers damages awarded by a court and actions taken against you as either party involved in dispute are responsible for their legal costs as well.
Business Insurance Example 4:
In the case of a disaster like fire or flood, this policy covers the cost incurred in repairing/replacing damaged property like stock and equipment. It also provides compensation to your employees for any financial loss incurred due to damage done by a disaster. You need to carefully look at what each policy offers because some will cover financial loss only, while others will compensate for any financial and physical loss.
Business Insurance Example 5:
Business insurance is also available for individual entrepreneurs like drivers running their own transportation service business.
What this covers is damage caused by the driver while performing his duty to other vehicle or property. This includes damages done by faulty equipment used in the task as well as legal costs incurred due to accidents.
Business Insurance Example 6:
Similar policies are available for individuals with their micro business; they can buy a policy that provides coverage against any injury resulting from accidents during work hours even if it’s your fault or that of another worker on the job sharing duties.
Its important to get quality advice from an insurance broker.
There are many types of insurance policies, terms and conditions that make using an insurance broker a smart move.
Trades, Employment Practices Liability, Management Liability
Carpenter
15 staff
$12M turnover
Payment: $205,000
Background
A female carpenter was contracted to a building company to provide a service. Part of her duties involved being on site with a team of other workers, most of whom were male. A complaint was made to the Australian Human Rights Commission where she alleged that her supervisor sexually harassed her over the duration of her employment by touching her inappropriately and making inappropriate comments. She refused to return to work after reporting the incident to the building company on the grounds that she is suffering major depression as a result of the alleged sexual harassment. She made a workers’ compensation claim due to her alleged inability to return to work. She also lodged a complaint against both the company and her supervisor with the Australian Human Rights Commission seeking approximately $160,000 in compensation plus future damages.
Outcome
It was deemed that the insuring clause was triggered. The matter proceeded to a conciliation at the Australian Human Rights Commission. The Claimant and the Insured agreed at conciliation to resolve the complaint by updating the anti-discrimination policy in the workplace, and providing a settlement.
Payment: $205,000
For more information contact www.newcastleinsurancegroup.com.au
OH&S, Management Liability
Electrical Company
12 staff
$15M turnover
Payment: $120,000 fine plus, $130,000 in defence costs.
Background
A electrical engineer who was inspecting and installing wiring on an industrial building site. The employee was severely injured when a pile of debris fell on him. He was airlifted to hospital but unfortunately died two days later. A formal Occupational Health and Safety investigation began which eventually led to the company being prosecuted. During the investigation, it was deemed that the company had failed in its duty of care to provide a safe work place for its employees.
Outcome
It was determined that the Insuring clause of the Policy was triggered and indemnity was extended to the Insured. Following a one day hearing, the company was found liable and was fined.
Payment: $120,000 fine plus, $130,000 in defence costs.
For more info contact www.newcastleinsurancegroup.com.au
Management Liability, OH&S, Trades
Electrician
5 staff
$8M turnover
Payment: $450,000 fine plus, $100,000 in defence costs
Background
An employee electrician contracted by the insured electrical contracting company was inspecting wiring on a building site. During the inspection, the contractor suffered severe electric shock whilst inspecting the wiring. It was later discovered that certain precautions were not followed on site. The employee was left with severe burns to his right arm and face. The insured company was subject to a formal Occupational Health and Safety investigation and prosecution.
Outcome
It was determined that the Insuring clause of the Policy was triggered and indemnity was extended to the Insured. The company vigorously denied and successfully defended the most severe allegations allegations. Despite their attempt at defending the claim, the company was fined for the negligent actions of their employees.
Payment: $450,000 fine plus, $100,000 in defence costs
Management Liability, OH&S, Trades
Plumber
9 staff
$11M turnover
Payment: $120,000 fine plus, $130,000 in defence costs
Background
A team of 3 plumbers were contracted to attend an industrial building site in Western Australia to undertake certain tasks in the overall building project. The team consisted of new recruits who were new to the job. Unfortunately, on the first day of the project, two of the novice electricians were seriously injured. One contractor suffered a deep laceration on his hand whilst the other contractor lost partial hearing in his left ear due to failing to wear the safety equipment correctly. A formal Occupational Health and Safety investigation began which eventually led to the company being prosecuted.
Outcome
It was determined that the Insuring clause of the Policy was triggered and indemnity was extended to the Insured. Following a two day hearing, the company was found liable and was fined.
Payment: $120,000 fine plus, $130,000 in defence costs
For more information contact www.newcastleinsurancegroup.com.au
Crime, Management Liability
Project Management Company
8 staff
$6.2M turnover
Payment: $80,000
Background
Over a period of 9 months, an employee of the insured project management company misappropriated $80,000 of their employer’s money by pocketing cash received from Clients in payment of their invoices billed (via EFT transfers). The employee had a gambling problem and admitted to stealing the funds. The employee was prosecuted by the police and was unable to pay the stolen funds back to their employer as the funds were gambled away.
Outcome
With the assistance of an crime investigator, the insured was able to prove the loss of $80,000 and was then able to claim this from back from the insurer.
Payment: $80,000
