Business Management Liability – What’s it all about?
What on Earth is Business Management Liability Cover?
Business Management Liability Insurance exists to cover the exposures and risks in managing a business. Directors, managers and officers all face personal and corporate liabilities in managing a company. It’s in the contract that you sign, or that you give out, but very few people ever read all the small print. Most people are in business because they love the day to day operations. They’re not there to think about the legal aspects of their actions. But they probably should. Claims on Business Management Liability Cover can be costly and drag on for long periods. Court actions can potentially involve many people (especially when it involves unions), multiple lawyers and internal investigations. The Corporations Act, which regulates company law in Australia, is what lawyers use to refer to when preparing a claim. If you’re in a business other than law, you probably aren’t an expert in industry regulations. That means you should probably talk to someone who is. Sure Insure have spent years dealing with experts in Business Management Liability Cover policies. These companies know everything there is in order to effectively analyse your risks and exposure.
How is this different to Public and Product Liability?
Business Management Liability Cover is quite different, and the answer is, that if you deal with the public, you will probably need both. When you are a manager or director of a business, your decisions affect both your customers and your employees. Management Liability Insurance is all about protecting yourself and your team against bad decisions that affect your employees. Public and Product Liability is there for protection against your company’s actions and products that might injure customers or the general public. For example, if you run a cafe and accidentally spill boiling coffee on a customer. Or if you have a shop that sells something that is not up to Australian standards and which catches fire. Public Liability also covers you if a customer has an accident or trips on equipment you’ve left lying around.
But I didn’t mean it!
Most Directors, Officers and Managers don’t make bad or questionable experiences on purpose. Almost every time it’s because something that has been rushed for some reason or other. With the best will in the world it’s impossible to ensure that every decision will always be the best one. As your company grows, it’s equally hard to take into account the lives of all of your employees. When someone’s safety is affected by WHS decisions or someone’s personal rights are infringed, it’s almost always unintentional. The majority of managers don’t mean to be discriminatory with their decisions and actions. That doesn’t mean you can expect employees to be satisfied with you just saying sorry. Your company’s reputation can be badly affected by individuals sharing stories of unfair treatment and, frequently, journalists can be involved.
What happens if someone makes a claim?
There can be costly investigations which affect overall productivity. Business Management Liability Cover helps you cope with a financial slump caused by employees taking part in an investigation. The investigation may go in your favour or against you. If it goes against you, you may need to pay damages and possibly industry fines. You may also have to pay the court costs of the person making the accusation. Insurance will pay for your costs and anyone else’s that you are ordered to pay. You should also take into account that once one person launches an action, it is very common for others to join in. This compounds the problem, makes it more visible and damages your reputation.
How to make better decisions and avoid claims on Business Management Liability Cover
Decisions are part of life. They need to happen in order for things to evolve and move forward. Sometimes a decision is great and leads to benefits for everyone. Sometimes it can have a neutral effect. But other times, a decision can be catastrophic and lead to major fall-out. There are some things you should take into account when preparing to make a decision. The Harvard Business Review published a useful article on decision making by industry expert Torben Emmerling. This link will explain the importance of reducing bias through choosing teams with a mix of views. Good decisions tend to be holistic in nature. This approach takes into account all aspects of a business. Unless you are strategically changing the platform or mission, you need to consider all aspects of a company. For that reason it is a good idea to make sure you have a range of views represented before taking action. This means you have the opportunity to consider a range of alternatives and assess their impacts before making a choice. When making a decision affecting your workforce, you should always first ask whether it is NECESSARY. Identify alternatives and evaluate their pros and cons. Don’t do this in a vacuum; get people involved. The more transparent you make a decision-making process, the more opportunity someone has to speak up before problems happen. The exception to this rule is where a decision affects operational processes and safety. In this scenario, you might be better off with a team comprised of experts and risk assessment professionals.