Management Liability Insurance

Breach of the Work Health and Safety Act

A construction company faced allegations that it had failed to ensure that employees of sub-contractors were not placed at risk of injury from the use of a mobile crane, in breach of the Work Health and Safety Act. The construction company was investigated by the relevant authorities and a claim was filed.

The construction company incurred a fine of $100,000 and defence costs of $150,000.

Licensing breach

An investigation finds that a hotel has breached the maximum capacity specified by its Liquor Licence. A 5 figure penalty is payable.

Licensing breach

A company is prosecuted following an accidental breach of regulations concerning a protected wetland site. No damage is identified and there is no finding of a deliberate contravention or motivation to save costs. While a 7 figure corporate penalty is possible, a guilty plea for the accidental breach results in a 5 figure penalty.

Wrongful dismissal

A senior employee is dismissed after lodging complaints of bullying and aggressive conduct by the managing director. Complaints are also made of racial discrimination and disability discrimination. Action is commenced in the Federal Court and the matter is settled for a 6 figure sum.

Unfair dismissal

A pregnant employee is dismissed for non-attendance. The manager who dismissed her says he was not aware of her pregnancy – although the company fails to reverse this decision when the employee produces confirmation from her G.P. The case is settled for a 5 figure sum.

Discrimination

A female employee is made redundant. She complains her line manager constantly belittled and insulted her in front of colleagues with cutting remarks and offensive comments. The case is settled for a 4 figure sum.

Duress

An employee complains of being asked to form an unacceptably close relationship with a client. The employee claims that once they refused, they were dismissed. The case is settled for a 5 figure sum.

Fraud by a lone employee

An employee who processes invoices also has access to the supplier creation system. The employee sees that when invoices are approved for payment, the financial controller examines the largest payment in detail and then signs the rest. The employee creates a false supplier and makes many small payments totaling thousands of dollars over several months.

Fraud by internal collusion

A quality control manager labels undamaged goods as substandard to be marked for disposal. His accomplice, the company’s stock manager, arranges for the “faulty” goods to be removed from the premises and the goods are sold off in pubs and on internet auction sites.

Fraud by an employee colluding with customer

An employee is empowered to negotiate discounts with clients up to 20%. He approaches his closest clients and agrees that their current discounts of 5% can be quadrupled on the understanding that the additional discount is split between client and salesman.