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Management Risk: Include Defamation
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We meet new and existing clients daily to help evaluate management risk and identify risk appetite.
The critical question we ask is:
What level of risk are you prepared to take when making operational decisions in your business?
- Low
- Medium
- High
Our risk discovery journey helps you use financial data, strategic growth plans and current operations to determine the level of risk your business can afford.
What is management risk?
Management risk looks at the factors that expose your senior management team to legal action. Unfortunately, in today's litigious environment, no business relationship is free of risk.
Therefore, it's vital to consider your dealings with other parties, including employees, suppliers, investors, competitors, customers, government agencies, regulators and creditors.
While you may feel that you have strong relationships with internal and external parties, they have the potential to cause harm to your business at any time.
Therefore, it's critical to protect your business against the costs of any legal action taken against you, your directors, or the business.
Types of management risk to consider
There are different types of management risks to consider, such as:
- Defamation
- Crime
- Employment
Today, we'll focus on defamation and why you should protect your business against legal action.
Defamation
Does your business make comments about clients in emails, in office conversations or whilst out at coffee in public venues?
Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.
A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.
Does your business make comments about clients in emails, in office conversations or whilst out at coffee in public venues?
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Clear Insurance
You never know who may be listening or their connections to staff, suppliers or investors.
Why does it matter? It matters because it can lead to legal action against your company or directors to repair damage to their reputation.
It happens, and a court case's outcome can be costly.
Case Study Example:
A senior employee of a civil construction company sent an email to a few staff members, which contained statements about two of their suppliers that could be perceived as defamatory.
Outcome:
The suppliers found out about the email and commenced proceedings against the author of the email. Mediation resolved the matter with a compensation payment of $60,000 to the suppliers. Plus, the company paid $57,390 to defend the business against legal action. The company suffered a total loss of $117,390 because of an email between employees.
Without insurance, the company would have to pay the loss from existing cash flow.
How can Clear Insurance help you?
We build your risk profile to help you decide whether to keep, mitigate or transfer risk to insurance.
We'll evaluate existing insurance programs to help streamline policies, align renewal dates and make recommendations to address critical gaps in cover.
With our fee-for-service approach, you can feel confident that all advice is in your best business interests and not swayed by insurer commissions.
Contact us today to see how we can help.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
Clear Insurance Pty Ltd. ABN. 41 601 916 689. AFSL No. 548953.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
All information above has been provided by the author.
All information above has been provided by the author.
Clear Insurance, ABN 41601916689, AFSL 548953
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