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SEMINAR
During October ProRisk in conjunction with DLA Piper, Fox Tucker and Dobson Mitchell & Allport Lawyers conducted Seminars around Australia. The Seminars marked an important milestone for ProRisk with the official opening of our Sydney office and for the first time the inclusion of the Gold Coast as a Seminar location.
The Seminars focused on the minimum Professional Indemnity standards and capped liability schemes for certain occupations and coverage considerations in the Medical Malpractice/Allied Health arena.
Plans are underway for future Seminars in 2012. Copies of the overheads and the paper prepared by David Leggatt on Professional Indemnity Insurance and Minimum Standards are available on the ProRisk website.
MANAGEMENT LIABILITY CLAIMS EXAMPLES
ProRisk is able to provide competitive Management Liability quotations for Private Companies.
Private Companies and their directors, officers and employees are exposed to the legal consequences of unintended errors arising from their daily actions. The Company also faces potential exposure for financial losses caused by employee dishonesty. Below are some claims examples that highlight the exposures faced by Private Companies that would be covered by a Management Liability policy.
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Employment Practices Liability
A company specialising in the importing of marine equipment formally dismissed an employee for stealing items of stock. The value of the stock was not large but the matter could not be tolerated. After the first instance of stealing, the company closely followed the disciplinary procedures they were legally obliged to use and advised the employee that any further offences would result in immediate termination of employment. The theft continued and the employee was sacked. The dismissed employee alleged that his dismissal was unfair, that correct procedures had not been used and that he was the subject of harassment. The court found in favour of the company. The company’s legal costs in defending the claim were $57,250. None of these costs were recoverable from the sacked employee as he had no financial resources.
NOTE: ACE’s Elite Management Liability insurance policy, available through ProRisk, provides cover for the legal costs of an Insured Organisation in relation to claims made against the company by any person who was, now is or becomes, during the policy period, an employee for an actual or alleged employment-related breach. The policy also covers damages awarded to an employee.
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Employee Crime
The insured was a management consultancy company specialising in the provision of salary packaging services for a range of clients. An amount of $110,000 had been taken over a period of time by 2 employees conspiring when processing EFT payment transfers. One employee would process the payment to their personal account, and the other employee authorised the transaction as a secondary approver. The discovery was made months later by which time one of the employees had resigned. In addition to the direct financial loss suffered by the company, it also incurred additional costs to investigate the claim.
NOTE: ACE’s Elite Management Liability insurance policy, available through ProRisk, provides cover for direct financial loss to the company resulting from a single act, or series of related, continuous or repeated acts, of fraud, dishonesty or theft committed by an employee. It also provides reimbursement to the company of any reasonable expenses (up to a capped limit) incurred by the company in investigating or establishing the existence and amount of the direct financial loss resulting from an employee’s crime.
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Retired Directors
The insured was a company specialising in the management of marinas. Two years ago, one of its longstanding and respected directors retired from the company. At that time the company held a Management Liability policy to protect its directors and officers and itself against financial stresses caused by unexpected legal issues. Due to an oversight the policy had not been renewed.
The policy however had a clause that ensured that if it was not renewed, retired directors continued to be covered for a further 7 years. This was because there was always the chance that in the period following the non-renewal, an allegation (fair or not) of a wrongful act could be brought by a regulator, employee, client or customer and would need to be dealt with.
Last week a writ addressed to the former director of the marina management company arrived. She was being sued for the failure by the directors to ensure that the work place they were responsible for was free of harassment and prejudice. The claim was brought by a former employee. The claim against the retired director was for $147,000. She currently earns a small amount of money from part time consultancy to a local business.
NOTE: ACE’s Elite Management Liability policy, available through ProRisk, provides cover for directors and officers who retire before the policy expires, for a period of 84 months after such expiry in respect of conduct occurring before such expiry provided that a discovery period is not purchasable and the policy is not renewed or replaced with another policy affording D&O cover.
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Occupational Health & Safety
The owner of a company was alleged to have been in breach of its Occupational Health & Safety obligations to his employees following an accident in which two fully trained electricians suffered multiple burns to their bodies. The company’s sole director was prosecuted. The director had no insurance that responded to such a claim. The director successfully defended the prosecution which took 17 months and resulted in legal expenses in the region of $215,000. These costs were funded by the director personally.
NOTE: ACE’s Elite Management Liability insurance policy, available through ProRisk, provides cover for insured persons for defence costs and legal representation expenses for occupational health and safety matters, including workplace deaths.
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Did you know
ProRisk is best known as a specialist in Professional Indemnity insurance but did you know that we can also offer:
 Medical Malpractice
Public and Products Liability
Personal Accident
Specified Items in Transit (Tools of Trade)
Management Liability
Information Technology Insurance
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Feel free to contact a member of the team with any queries.
ProRisk your problem solving underwriting solution.
Email: enquiries@prorisk.com.au
Phone: 03 9235 5255
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