In Australia, many regulatory government bodies have become increasingly stringent regarding Occupational Health & Safety within the workplace. As a result, it has become extremely important for businesses to ensure they not only have the correct policies and procedures in place to ensure the safety of their employees, but to also have adequate insurance in place to protect you and your business from any statutory risks that may arise.

What is Statutory Liability?

Businesses in Australia are expected to comply with a variety of legislation across all industries relating to workplace safety. If a business were to breach a law imposed by a Government or regulatory body, they could potentially face an investigation or prosecution, resulting in hefty fines and penalties.

Under WHS statutes in Australia, there are three categories of offence relating to a breach of a relevant section of the Act or regulation. For example, the maximum Corporation penalty for a Category 1 offence is $3 million.

There are a staggering number of statistics each year demonstrating the high number of OHS related legal proceedings resulting from the serious injury or death of an employee or contractor. Having the correct policies and procedures in place is essential for all businesses to minimise the risks involved in carrying out their duties, however, there is always the risk that a business could unintentionally breach a law. This type of exposure may arise as a result of the actions of the directors, officers and employees of an organisation.

How Can I Ensure My Business is Protected?

More often than not, business owners do all they can to ensure they are compliant with statutory laws and legislation. With the large number of laws applicable to different types of businesses and industries, while also accounting for laws that that apply generally to all businesses and industries, it can be difficult to keep track of them all.

In order to ensure your business is compliant, and reduce the likelihood of a breach of legislation, there are some strategies businesses can implement to protect their businesses.

• Developing and Implementing a Risk Management Plan

One of the most effective ways of reducing the risk of being held accountable for statutory liability is to develop and implement a Risk Management Plan. The process of setting up a risk management plan involves assessing the numerous laws and regulations that apply to your business and then outlining what needs to occur to ensure you abide by those laws. Risk management plans go beyond helping you adhere to statutory law. For instance, they are great for ensuring your employees are aware of the risks their jobs present and the measures they need to take to ensure they are safe.

It is advisable to provide your employees with training content upon employment including your risk management plan. Such content should explain your risk management strategies and why they exist. The content should also outline mandatory laws as well as standard health and safety regulations and expectations.

If you are concerned that this process may be overwhelming or require assistance in determining what legislation is applicable to your business and industry, there are risk management planning professionals out there who can assist you in developing your health and safety policies and procedures.

For further information regarding workplace safety in Australia, please visit Safe Work Australia.

• Ensuring You Have Adequate Insurance Coverage

Statutory Liability insurance may provide cover for certain individuals and the company for fines and penalties resulting from the operation of the business, including fines related to workers compensation and occupational health and safety. In the event you have been held liable for a breach in legislation, Statutory Liability insurance may assist in covering the defence costs incurred from any resulting formal investigations as well as any fines and penalties issued. Without such cover in place, many small businesses would struggle to recover financially from the incident as they simply do not have the same backing as large corporations do to cover hefty penalties and legal fees.

Reading The Fine Print

When seeking the right Statutory Liability policy for your business, it is extremely important to read the fine print when reviewing the wording of policies. Many Statutory Liability policies offered by insurers vary significantly in terms of their inclusions and exclusions, so it is necessary to review what exactly each policy will offer you as you don’t want any nasty surprises when it comes to making a claim.

As a business owner, it is imperative to ensure you have the correct policies and procedures in place to enforce the safety of all of those within the workplace. Incorporating a Statutory Liability insurance policy into your risk management strategy is an effective measure in ensuring your business bounces back from a statutory claim. Taking the time out to develop a risk management plan could be the difference between avoiding a lengthy and costly legal process if you are found to be in breach of a legislation, something no small business owner wants to face.

Statutory Liability cover can be incorporated as a part of a Management Liability policy. For more information, please contact us.