Statutory liability insurance brokers

Statutory liability insurance helps protect a business, senior management and employees if they face a regulatory investigation or allegation of breaching certain legislation while carrying out business activities.
 
Depending on the policy, statutory liability insurance may help cover legal defence costs, investigation expenses, representation at hearings, and certain fines or penalties where they are legally insurable.
 
Importantly, this cover isn’t a substitute for strong compliance procedures. It’s designed to provide financial protection when an unintentional mistake, oversight or alleged breach leads to regulator action.
 
At Ian Jones, our statutory liability insurance brokers can help you understand what’s covered, what is excluded, and whether your policy suits your industry, state or territory, and operating risks.

The main difference is the type of claim each policy is designed to cover. Public liability insurance responds to third-party injury or property damage claims, whereas statutory liability insurance protects against the financial impact of regulatory action.
 
For instance, public liability may apply if a customer is injured at your premises or your business damages someone else’s property. On the other hand, statutory liability may apply if a regulator investigates your business for an alleged breach of workplace health and safety laws.

Professional indemnity insurance covers claims alleging that your professional advice, service or design caused a client financial loss. Meanwhile, statutory liability insurance covers certain regulatory investigations, legal costs and penalties arising from unintentional breaches of legislation.
 
For example, professional indemnity may apply if a client claims your advice caused them financial damage. In contrast, statutory liability may arise if a regulator investigates your business for breaking a consumer law.

A breach of statutory duty can become expensive quickly. Depending on the law involved, your business may need to pay fines, civil penalties, court orders, enforceable undertakings, remediation costs or legal action. In the most serious cases, individuals may also face criminal prosecution.
 
The outcome usually depends on what happened, how serious the breach was, the regulator involved and whether the conduct was accidental, careless, reckless or intentional.
 
Even if no fine is issued, responding to an investigation can still cost time and money. You may need legal representation, help preparing documents, internal reviews, representation during interviews or hearings, and significant management time to deal with the process properly.
 
Statutory liability insurance can help ease that pressure by covering certain defence costs and investigation expenses, subject to the policy wording and what the law allows.

Depending on the insurer and policy wording, a statutory liability insurance policy may cover:
 

• Legal defence costs
• Investigation and inquiry expenses
• Representation at official hearings
• Court attendance costs
• Certain civil fines or penalties, where legally insurable
• Enforceable undertaking costs, if included
• Cover for directors, officers, managers and employees
• Regulatory matters involving workplace health and safety law, environmental law, privacy, employment law,
• consumer law or industry-specific legislation

 
Not sure if you’re covered for these risks already?
 
Our experienced brokers can review your current policies and identify whether you have a genuine statutory liability gap or whether your existing liability insurance provides adequate protection.

Statutory liability insurance usually does not cover wilful, deliberate or intentional acts that break the law. Common exclusions include:
 

• Fraud, dishonesty or criminal conduct
• Gross negligence or recklessness
• Prior or known claims
• Claims that are already underway before the policy started
• Taxes, duties, levies, rates, charges or fees
• Property damage or bodily injury claims covered under other policies
• Certain pollution or environmental events, depending on the wording
• Motor, marine or aviation offences
• Asbestos-related matters
• Joint venture exposures, unless specifically covered
• Penalties that are unlawful to insure in your state or territory

 
That said, every insurer treats exclusions differently. This is why policy wording is so important. Our statutory liability insurance brokers can compare your options and explain where the limitations sit before you commit to cover.

You may need statutory liability insurance if your business could be investigated, fined or face legal costs for breaching Australian laws, regulations or industry requirements.
 
This cover is worth considering if your business has employees, manages worksites, handles customer data, works with contractors, operates in a regulated industry, deals with environmental risks, provides essential services, or has directors and managers responsible for compliance decisions.
 
Today, many Australian businesses take out statutory liability insurance because:

• Regulatory obligations are on the rise: Businesses face growing responsibilities across workplace health and safety, privacy, environmental management, employment law and industry-specific compliance.
• Minor incidents can spark investigations: Complaints, audits, workplace reports, anonymous disclosures or regulator reviews can all lead to a formal inquiry.
• Legal defence costs add up fast: Even if your business has done nothing wrong, responding to a regulator may require legal advice, document preparation, interviews, specialist support and management time.
• Directors, managers and employees may be personally liable: Depending on the law involved, senior decision-makers, supervisors and staff can be named in an investigation.

 
Without statutory liability insurance, your business will need to pay its own legal defence costs, investigation expenses and other response costs.
 
Don’t take the risk. Our brokers can review your exposure and recommend cover that suits your industry, business size, risk profile and state or territory.

The cost of statutory liability insurance depends on your industry, business size, turnover, claims history, regulatory exposure and the level of cover you need.
 
When determining the price of your premium, insurers usually consider:

• Your industry and business activities
• Annual turnover
• Number of employees
• State or territory of operation
• Workplace safety risks
• Environmental exposure
• Compliance history
• Previous claims or investigations
• Policy limits
• Whether the cover is standalone or part of a management liability package

 
The best way to understand the cost is to have a broker review your operations and compare suitable statutory liability insurance options. Get started with Ian Jones today.