No matter what type of business your run, the most important cover you can take is to protect you against being sued.
Hurting Someone / Damaging their Property - Public & Products Liability
The base level of cover for most people is referred to as Public & Products Liability. This is a combination package which protects you against anyone suing you for either physical injury you’ve caused them, or damage that’s occurred to their physical property. Depending on your occupation, you may also need some special extensions to cover – e.g. cover for faulty workmanship if you’re a mechanic.
Who needs this cover? - Pretty well everyone – whether you’re a property owner, operating a small business from home, selling retail goods, performing a trade or acting as a professional – you need Liability cover.
Giving Advice – Professional Indemnity
What happens if you cause someone a financial loss instead of actually harming them or damaging their property? This is where Professional Indemnity (“PI”) helps by protecting you against someone suing for your advice – or for NOT advising them if you should have!
There are several variations on this cover – standard PI will protect most professional consultants, but may need custom extensions – e.g. protection for contractual liability if you’re taking responsibility for certain outcomes under a signed agreement for your particular advice.
Other industries such as IT have speciality packages that include Product Recall Expenses, while those in the medical field have Malpractice Cover. Cover can also be extended for “Quasi-Legal” fees for professional industries that have semi-legal bodies that can issue determinations – e.g. an Ombudsman.
Who needs this cover? Anyone that takes a fee for their opinion requires PI.
If You Own a Company or have Staff – Management Liability
On top of the above situations, there are a few other areas where you may be left open to legal action which can be plugged with a Management Liability Package. This is a combination of several insurances including:
- Directors & Officers Cover (to protect directors from being personally liable for the actions of the company)
- Employment Practices Liability (to protect you against staff – or people you are looking to hire – taking you to court over discrimination / FairWork etc)
- Crime (protection against employee’s committing crime such as fraud or embezzling money from you)
- Statutory Liability (cover against government agencies imposing fines or penalties – e.g. breaches of OH&S)
Who needs this cover? If you pay an annual fee to ASIC for company registration, or are a board member of a Not for Profit, you should consider Management Liability as a standard cost of the company. It’s that simple.
I Handle People’s Data – Cyber Liability
A new type of policy that has become increasingly important over the last few years is Cyber Liability. This cover protects you against a range of IT related issues that wouldn’t otherwise fit within the limits of any of the above covers. For example, claims for failing to keep data secure including claims for compensation, investigations, payment of fines and penalties and the new Privacy Act. Standalone covers can also be extended to give cover for lost profits resulting from a cyber-attack on your business as well as remediation expenses to get things fixed.
Who needs this cover? Almost every business has exposure to this risk – but those dealing with large databases of client information can’t afford not to take this cover.