Risky Business

November 2011

People on Hand

Welcome to this month's edition of "Risky Business".

This month we discuss Management Liability, which helps to cover yourself for actions that may be made against you and your business.


  Insurance News 

Man walking Tightrope
Why Do You Need Management Liability?


Managing a business has a large number of exposures associated with it and it is surprising to learn that many clients choose not to cover themselves for actions that may be made against them. This can be easily included in their insurance programs.

A company and its directors face both personal and company liabilities from numerous stakeholders including the following:
  • Employees - actions alleging discrimination, harassment, breach of employment contract, defamation, misleading misrepresentation, wrongful discipline, etc;     
  • Creditors - alleging that the Director allowed the company to trade whilst knowing it could not pay its debts;      
  • Government Agencies - Directors and Officers may be personally liable for breaches of hundreds of statutes (eg Australian Tax Office, Australian Securities Commission, Trade Practices Commission);       
  • Competitors - Trade Practices Act claims brought against the Directors for misleading and deceptive type conduct;       
  • Shareholders - alleging that the Directors mismanaged the operations of the company and its funds.

If there is an alleged breach of company law or regulation, your conduct as a a manager and as a company is questioned. It is possible that a claim is completely without foundation, but it still costs time and money to defend a matter to a successful conclusion. Do you have the resources to fund your own defence?


Let's Try a Quick Quiz...


Answer the following questions to determine if you have an exposure: 

1. Are you an incorporated entity?
2. Do you have customers or clients?
3. Are you required to comply with any legislation?
4. Do you have employees?
5. Do you have competitors?
6. Do you incur debts?
7. Do you have dealings with other third parties?

If you answered 'yes' to just one of these questions, then you have some exposure to Managers Liability. Yes to all, you have a substantial exposure to many risks. 

To read more on this, please click here. 

Please click here for claim scenarios.

  Joke of the Month 

A Duck's Bill


A woman brought a very limp duck into a vet's surgery. 

As she laid her pet on the table, the vet pulled out his stethoscope and listened to the bird's chest.
After a moment or two, the vet shook his head sadly and said "I'm so sorry, your duck Cuddles has passed away."
The distressed owner wailed "Are you sure?"
"Yes, I am sure. The duck is dead" he replied.
"How can you be so sure?" she protested. "I mean, you haven't done any testing on him or anything. He might just be in a coma or something."
The Vet rolled his eyes, turned around and left the room, and returned a few minutes later with a black Labrador retriever.
As the duck's owner looked on in amazement, the dog stood on his hind legs, put his paws on the table and sniffed the duck from top to bottom. He then looked at the Vet with sad eyes and shook his head.
The vet patted the dog, and took it out, and returned a few minutes later with a cat.
The cat jumped up on the table and also sniffed delicately at the bird from head to foot. The cat sat back on its haunches, shook its head, mewed softly and strolled out of the room.
The vet looked at the woman and said, "I'm sorry, but as I said, this is most definitely, 100% certifiably, a dead duck."
The vet turned to his PC, hit a few keys and produced a bill, which he handed to the woman.
The duck's owner, still in shock, took the bill. "$150!" she cried. "$150 just to tell me my duck is dead!"
The vet just shrugged, and said "I'm sorry. If you'd taken my word for it, the bill would only have been $40, but with the Lab Report and the Cat Scan, it's now $150."



See you next month.




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