Lawyers see COR liability insurance as logical
No shield for bad behaviour but some sort of buffer needed otherwise
Beyond good practice, companies should consider Chain of Responsibility (COR) liability insurance against unintended breaches, lawyers at Holding Redlich say.
Under the COR, any person who consigns, dispatches, packs, loads, carries, receives or unpacks goods as part of their business can be found liable for breaches of the Heavy Vehicle National Law (HVNL).
"Companies can protect themselves against possible breaches by implementing COR compliance policies and practices and demonstrating that they took reasonable steps to prevent breaches from occurring as a result of their activities," Law firm partner Nathan Cecil and solicitor Dilip Ramaswamy say.
"However, it is also logical to manage risk, reduce uncertainty and protect your livelihood by way of insurance."
Penalties will be imposed based on the severity of the offence and are usually enforced as administrative or court penalties.
An accumulation of minor and substantial breaches can result in heavy fines that will impact on the financial stability of the business.
"In addition, breaches can result in investigations throughout an organisation and have even resulted in the grounding of heavy vehicle fleets, exposing the company concerned to significant business losses," the lawyers point out.
"Therefore, companies may look to insure against some (but not all) of these risks by applying for a mixture of the following insurances: public liability; professional indemnity; management liability; directors and officers liability; transportation."
Intentional, deliberate, dishonest, fraudulent or malicious acts, including acts of gross negligence or recklessness, will attract no cover but they note "there is clearly a grey area between the two extremes of intentional criminal conduct and civil negligence".
Check out the full advice in January’s issue of ATN. Subscribe here.