If you're a business owner, you know there are so many things that can go wrong. Good management liability involves having the foresight to know what these things could be and taking the steps to avoid, minimise or mitigate against them.
Your business can be exposed to potential liabilities and associated costs which could arise as a result of possible actions from what we term "mismanagement". Here we would like to share with you what insurance safeguards are available in order to support you during any such occurrence. That's where Management Liability insurance comes in.
In part one of this series, we explained what Management Liability insurance is and why you may need it for issues around unfair dismissal, harassment and discrimination in the workplace. In part two of this series, we explained why you may need Management Liability insurance for occupational health and safety issues. In the final part of this series, we're going to explore why you may need Management Liability for crime, identity theft and tax audits.
If you have crime cover as part of your Management Liability insurance, it may provide your company cover for financial loss coming from crimes such as:
- Electronic and computer crime
- Destruction and damage of money
- Crime by shareholders
- Fraud by employees, contractors and consultants
Imagine you were a medical practitioner and an employee, relief worker or contractor stole drugs from your practice. Your losses could be covered under Management Liability insurance.
Or imagine that your accountant - who is responsible for paying wages - was making additional, duplicate payments to a personal bank account while underpaying other employees. You didn't discover the loss until the accountant left and a new employees started in the role. Through your Management Liability policy, you would be able to put in a claim to recover lost funds.
Essentially, if a crime is committed against your business and you lose financially because of it, having a Management Liability policy in place may reduce the impact these crimes have on your business' finances.
Identity theft fraud cover
With such advancements in technology, it's not uncommon for personal information to be stolen. Thieves can steal your personal information - like your name, birth date, tax file number or credit card information to commit crimes without being caught or to pay for things without actually paying for them.
Identity theft and fraud costs Australia upwards of $1.6 billion each year. Additionally, approximately $900 million is being lost annually by individuals through credit card fraud, identity theft and scams.*
If you have a Management Liability policy, you may be reimbursed for any money you may have spent in order to:
- Reclaim your financial identity
- Get any new documents or cards
- Repair your credit report
This includes, but is not limited to costs to receive legal help and representation and costs of phone calls.
Tax audit cover
Any business can be the subject of a tax audit by the ATO, not just large, high wealth businesses. The ATO and other agencies are shifting their focus towards small to medium sized businesses, as well as those who work there. Additionally trusts, self-managed super funds and those with rental properties are gaining the interest of the ATO.
Being audited by the ATO can be stressful and take up a lot of time, plus it may distract you from what's important, like growing your business. Most businesses rely on professionals to assist and take them through the process of being audited, which comes at a cost. Being audited also results in an increase in compliance activities around payroll and super obligations, amongst others.
Having Management Liability may help with any additional costs that come with being audits if the ATO happens to come knocking on your door.
To find out more about Management Liability insurance and how it can help your business, call us today on 1300 305 834 and ask to speak to one of our brokers.
Our advice is general in nature. To read the full General Advice Warning click here