As a business owner in Australia, you’ll need to follow the rules and laws enforced by the Government and regulators. However, having statutory liability cover through your business insurance can help you deal with the expense of an official investigation.
Statutory liability insurance is typically a feature of management liability insurance policies and sometimes available as an optional extra through other business insurance products, statutory liability insurance covers the company, senior management and employees for allegations of wrongful breaches of key legislation in the course of the Insured’s business. The policy meets fines and penalties payable in specified circumstances and related legal expenses.
For example, if your business unknowingly breaches health and safety or environmental laws, your business may be taken to court by a government body. Statutory protection cover can help you afford legal costs and potential fines so your business can continue to operate.
With statutory liability cover, you could claim the cost (to a limit set out in your policy) of fines and penalties for breaching:
Fines can become very costly and you may still face legal expenses even if there is no deliberate wrongdoing by your business or if you’re found to be innocent. Cover for statutory liabilities can also help with other legal expenses, including the cost of a governmental inquiry or regulatory investigation.
However, it doesn’t cover all wrongdoing and cases. It’s wise to check out a business insurer’s Product Disclosure Statement (PDS) or policy wording for details on exactly what’s covered and excluded, as it may vary between providers.
The costs or penalties of the following situations typically aren’t covered by statutory protection:
Always remember to read you Product Disclosure Policy or Policy Wording to know for sure what you are and aren’t covered for.
You may find slight differences what’s covered under different types of policies. Some statutory liability cover will insure directors and members of a business’s upper management, who may be penalised separately to the business itself. Depending on how some business insurance providers structure their policies, these employees may also be covered under management liability insurance.
It’s vital to read the PDS/policy wording before taking out a policy, so you’re aware of what’s insured.
Statutory liability won’t cover your legal costs if a customer or member of the public sues your business over any damage or loss, such as slipping and injuring themselves on a wet floor while visiting your building, even if the injured person alleges you have breached legislation. Instances like this are covered by public liability insurance*.