A common question asked by clients is: What is the difference between Management Liability and Professional Indemnity Insurance.
Basically it is that Management Liability Insurance focuses on the 'act of running a company' whereas PI Insurance covers the 'activities' of the company. More importantly, Management Liability can cover fines or legal expenses incurred by you personally in relation to a business matter.
So for example Management Liability covers:
- Damages and claimant costs awarded against you personally
- Defence (i.e. legal) costs
- Investigation costs
- Civil fines & pecuniary penalties.
A good example is Sexual Harassment.
Even though it’s a few years old the David Jones case highlighted the risks. Under a Management Liability policy you can be covered for Employment Practices Liabilities such as claims made by current, past and prospective employees for issues arising from employment practices, including harassment, unfair dismissal and other employment issues.
Call your Insurance House Broker if you want to learn more.
Sacked for using a mobile phone
A professional truck driver was seen by several witnesses using a mobile phone while at the wheel of a fuel tanker and was duly sacked for serious misconduct.
The employee took his employer to the Fair Work Australia tribunal on the grounds of unfair dismissal.
The employee admitted that he was aware of the employer's mobile phone policy, which banned the use of mobile phones while driving.
Evidence at the tribunal heard that on the same day the employee had made nine calls or texts while driving the tanker. This and other evidence clearly demonstrated that the employee had been in breach of his employment conditions and that the employer had done everything fair, legal and by the book in sacking him.
The key lessons for employers are:
- It is important to have clear and consistent policies dealing with employee conduct.
- Employers should ensure that they adequately investigate employee misconduct.
- Fair Work Australia will consider the onerous obligations, for example workplace health and safety obligations, imposed on employers in "high risk" industries in terms of employee conduct and the seriousness of that conduct.
We made a video that illustrates how Management Liability works.