Workplace health and safety has come under increasing government scrutiny in recent years and businesses must now comply with a raft of rules and regulations designed to provide greater protection for their employees at work.
Due to the large number of requirements, keeping abreast of their obligations can be difficult, so many businesses in Australia and New Zealand now choose to take out Statutory Liability Insurance to protect themselves from liability if they were to inadvertently breach one or more of these laws.
What is statutory liability?
Statutory liability is liability (responsibility) for an act or omission in relation to a law. While it is a term that can apply in almost any field, it is often used to describe business liability in relation to occupational health and safety, environmental and employment laws.
How can a business stay protected?
The best way that a business can protect itself against statutory liability is to develop a Risk Management Plan. This is a plan that;
- assesses all of the relevant laws that apply to the business
- outlines the particular actions required in each case and
- implements the appropriate procedures to ensure compliance.
Prevention and education are also important factors in workplace health and safety and your Risk Management Plan should also involve employee training in relation to risk and the development of safety-related policies and procedures.
In conjunction with Statutory Liability Insurance, a Risk Management Plan is the best protection a business can have to reduce the risk of being held accountable for statutory liability.
What is Statutory Liability Insurance?
Statutory Liability Insurance is a type of business insurance that covers your liability if your business unintentionally breaches a law such as an occupational health and safety regulations.
It is often a component of Management Liability Insurance, which also includes a range of other covers such as Directors and Officers Liability, Company Liability and Employment Practices Liability cover.
What is and isn't covered?
Statutory Liability Insurance includes cover for;
- Costs of any official investigations or inquiries related to a breach
- Liablity claims that come from pollution breaches
- Any fines or penalties awarded against your business
Statutory Liability Insurance does not include cover for;
- Fines or penalties resulting from your dishonest, deliberate, negligent or reckless behaviour
- Losses that come out of any claim against you for, asbestos, injuries to third parties, fraud, joint ventures, old or existing claims (in some cases), damage to property, wrongdoing and any additional but unrelated proceedings.
Why reading the fine print is super important
Terms and conditions vary widely with insurers, so it is very important to read the Product Disclosure Statement thoroughly when taking out Statutory Liability Insurance. You need to find cover that exactly matches your needs and the types of risks you are most likely to be exposed to in the course of running your business. So read the wording carefully and seek professional advice if at all unsure.