What is Statutory Liability Insurance

Here’s what every business owner needs to know

If you’re running a business, then you’re probably aware of maybe a handful of the more commonly known laws applying to business owners. What might come as a surprise to you is that there are actually well over 5,000 acts of legislation regulating business activities within Australia.

While it’s virtually impossible to remember every single one of these laws, all businesses should know about the consequences of breaking them. Businesses can be prosecuted and receive hefty fines and/or other penalties for breaching acts of Parliament.

Being fined for breaching a law and forced to pay the associated defence costs, can have a devastating impact on businesses, sometimes even rendering them insolvent.

Statutory Liability cover often falls under the banner of Management Liability Insurance and exists to protect businesses from legal expenses if they were to breach an act of legislation. In addition to compensating the insured for the fine, these policies can cover any reasonable legal and investigative fees that will also be likely to apply. Whilst some Australian States have prohibited insurance covering fines and penalties arising from WHS breaches, however, we are still able to cover the legal costs of defending an allegation of that WHS breach.

Not surprisingly, breaches of Work, Health and Safety legislation account for a high proportion of claims being made under Statutory Liability. Measures are being taken to curb workplace accidents in those industries with a higher element of danger including Mining, Agriculture and Construction. However, due to the physically intense nature of the work, these employees face a greater risk of injury than those in more sedentary roles.  

The fines for breaking WHS laws are often severe, as the Australian Government seeks to reinforce the importance of maintaining a safe work environment for all Australians.

Statutory Liability under ML Insurance also covers breaches of other types of legislation relating to consumer protection, employment practices, pollution, the environment, privacy, Chain of Responsibility (Transport Industry) and electrical safety.

Why your business needs Statutory Liability Insurance

As a business owner, you have a duty of care to the employees who place their trust in you. They naturally expect that you will provide them with a safe work environment. While you may be doing everything in your power to follow the WH&S regulations, unfortunately, no workplace is perfectly safe all the time.

The increasing demands placed on our everyday working lives mean that following standard safety procedures can be accidentally overlooked in our rush to meet a deadline or address a client’s complaint. Being so preoccupied with our core work activities, we don’t always have time to fully adhere to the Safety and Compliance rules, as strictly as we should.

As a business owner, you’re constantly at risk of breaching an act of legislation. Whether it’s due to your actions, the behaviour of one of your employees or a defective piece of equipment in your factory, the threat of litigation looms over you at all times.

Although you do your best to minimise the risks, you’re not resistant to this type of threat.

Berkley Insurance Australia provides world-class Statutory Liability Insurance under our Management Liability Policy. With this type of insurance in place, you can relax knowing that your business will not be financially damaged if you were to receive a fine or penalty from a regulatory authority. There are many matters to worry about when running a business, being fined for breaching a law needn’t be one of them!

Berkley Insurance Australia Management Liability Insurance – Policy Wording 

Employee Theft under Management Liability Policies: Understanding Cover and Claims