Business Insurance FAQs

Directors and officers of private companies and a company itself are exposed to liability for breaches of the duty they owe to others through a simple act, error or omission in managing a company. Management Liability insurance is policy designed specifically to protect against such risk exposures. Now cover is also available for Sole Proprietors and Partnerships which is tailored specifically to their business structures and risks.

The following are examples of possible claims:

  • Breach of Directors’ or Officers’ duties
  • Company or Entity breach of duties
  • Employment practices liability
  • Trustee liability for Superannuation fund
  • Crime cover for loss of money &/or stock
  • Tax investigation costs
  • Statutory liability
  • Occupational Health & Safety breach defence costs

For more information about Management Liability insurance coverage click on this link to our web page on this subject.

Question: I’m starting a new business – what insurance do I need?

Answer

Different types of business organisations require different policies to protect their business assets and to protect against business legal liabilities.

To assist new business owners Donnellys has developed a Small Business Guide to Insurance which shows the majority of business types and the range of policies available to suit each type of business listed.

Refer to our Home page for a link to the Small Business Guide.

Question: What’s the difference between Public Liability and Professional Indemnity?

Answer

It is important to understand the differences between Public Liability insurance and Professional Indemnity insurance.

Public Liability covers claims against you for bodily injury and property damage to someone that arises from the operation of your business. For example, if a person is injured on your premises, or if you damage property while visiting a client.
Professional Indemnity insurance covers claims that arise from a breach of the duty that you owe as a professional or an expert for services such as:

  • advice,
  • design,
  • consultancy,
  • analytic services.

Professional Indemnity insurance covers your civil liability that results from the conduct of your professional services. This includes:

  • contractual liability,
  • liability under the Trade Practices Act,
  • defamation,
  • infringement of intellectual property right,
  • liability for the acts of sub-contractors and consultants, and compensation and claimant’s costs and expenses.

Question: Does a Technology business have any Liability Insurance Issues?

Answer

Any organisation that develops, manufactures, licenses, sells, provides, advises, integrates any form of Technology and related services is exposed to litigation. The failure of a product, service or incorrect advice will expose that organisation to claims.

Legal Confusion
There is no consistent legal opinion as to whether software developed for a client is a “product” or a “service”. This is particularly important because most software developers are required to provide evidence of Professional Indemnity insurance under client contract conditions – but claims in respect of Products liability are excluded so there would be no cover if software is deemed to be a product.

Circuit board manufacturers & other hardware suppliers need Products Liability insurance to protect their legal liability for injury or property damage claims in respect of their products.

They also need Professional Indemnity for in-house design activities if applicable.
However, the most likely claim against a circuit board manufacturer or hardware suppliers is for financial compensation as a result of the failure of the product to perform as specified in a contract, rather than an injury or property damage liability claim. Claims for financial loss are not covered by a Products Liability policy which is the domain of Professional Indemnity insurance.

Technology Liability Insurance is the best solution
Technology Liability Insurance provides protection for organisations against legal liability for economic loss arising from the failure of their products, services and or advice in the conduct of the business in respect of acts, error or omissions and includes alleged breach of contract. It covers both hardware and software businesses.

This Insurance combines Professional Indemnity and Public & Products Liability insurance coverage to respond to the unique exposures of the Technology industry. Technology Liability insurance eliminates the potential coverage gaps which can occur when these policies are arranged separately due to legal issues. The cover includes defence costs associated with defending legal actions – even if you are found not liable.

Question: Am I covered for Cyber Crime under my Business insurance?

Answer

Digital technology has changed the way most companies do business but their insurance cover has not always kept pace. Cyber-attacks and other cyber events are now some of the most common forms of losses faced by businesses. As this risk is moderately new and has grown rapidly many businesses are not adequately covered by their existing business insurance.

Most businesses have insurance cover for fire. A cyber-attack or event is akin to a digital fire and can have a similar impact to the operations of your business.

Cyber insurance can COVER YOU for the following events:

  • Point of Sale intrusions
  • Web app attacks
  • Insider and privilege misuse
    • Physical theft and loss
    • Payment card skimmers
    • Crime-ware
    • Denial of service
    • Cyber espionage
    • Miscellaneous errors – Human error
    • Cyber extortion

     

  • For more information about gaps in traditional Business insurance for Cyber-events click on this link to our web page on this subject.

Question: What is Management Liability insurance?

Answer

Directors and officers of private companies and a company itself are exposed to liability for breaches of the duty they owe to others through a simple act, error or omission in managing a company. Management Liability insurance is policy designed specifically to protect against such risk exposures. Now cover is also available for Sole Proprietors and Partnerships which is tailored specifically to their business structures and risks.

The following are examples of possible claims:

  • Breach of Directors’ or Officers’ duties
  • Company or Entity breach of duties
  • Employment practices liability
  • Trustee liability for Superannuation fund
  • Crime cover for loss of money &/or stock
  • Tax investigation costs
  • Statutory liability
  • Occupational Health & Safety breach defence costs

For more information about Management Liability insurance coverage click on this link to our web page on this subject.