Being a small business owner is not for the faint hearted. With the innumerable rewards that come from owning your own business, also comes a great deal of risk.
Risks are managed and mitigated by business owners on a daily basis, from small every day issues to more serious strategic worries. One issue that faces many Australian businesses today is the pursuit of legal action against their company. Although you think that this will never happen to you, you should be prepared in the event that it does.
Reasons Businesses Are Taken to Court
Australian businesses find themselves in court for a number of reasons:
- Unlawful Pre-Employment Questions: Laws such as the Disability Discrimination Act make it imperative that you ask only what you are allowed to during an interview, and treat all applicants equally to avoid claims of discrimination.
- Disciplinary & Termination Errors
Dishonest Evaluations: Managers often play down employee’s bad performance on reviews, so when the termination occurs, the ex-employee may file a wrongful termination suit.
Termination Errors: If due diligence is not observed, employers leave themselves open to an unfair dismissal claim in the event of a termination of employment.
- Uninformed Staff: Supervisors and managers must be trained and updated on the full range of organisational policies and relevant workplace laws as they can be held responsible if a lawsuit ensues, causing enormous liability for the company.
- Injury: If an employee is injured at work, you can be held accountable. This is a very real threat to Australian businesses as preliminary data shows there were 117,815 serious workers’ compensation claims in 2012–2013 [Australian Workers’ Compensation Statistics, 2012–13, Worksafe Australia].
Whether you are ultimately found to be in the wrong not, defending yourself or your business against a lawsuit brought against you can be a costly process.
Legal Expenses Insurance can be taken out by individuals or businesses to protect against the costs of defending civil and criminal actions brought about by other individuals or companies. PSC Connect Authorised Representatives specialise in Legal Expenses Insurance and can provide expert advice and assistance in this area.
Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.
The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.