Life Insurance Australia :: Articles

Risk Management - 8 steps To Avoid Litigation

What are the essential steps in risk management to prevent litigation for my business?

Risk Management - 8 steps To Avoid Litigation
Accidents, mistakes and misunderstandings can happen in any business. Some are settled amicably, others grow into full-blown disputes, and before you know it you could be facing a legal claim.

Being sued is stressful, time-consuming and expensive.

Even if you win the case the disruption to your business can outweigh any financial gains.

A key objective for most businesses is to avoid being drawn into litigation in the first place and here we outline the steps freelancers can take to safeguard their business against litigation.

Eight steps to safeguard your business

Professional contract agreements.

No work should be done without a contract.

Always have one in place that defines scope of services and terms of remuneration before you commence an assignment.

Without an agreement the opportunities for misunderstanding and controversy are numerous.

Business Insurance
Image for Business InsuranceIf you're in the process of buying or renewing your business insurance, whether it be a factory, a shop, office, warehouse, a farm or whatever .. even a home-based business, we can show you a quick way through the maze of offers and options available on the market. Our Australia-wide broker panel will ensure that you get the best cover for your specific needs … and at the right price to suit your budget.

Documentation and tracking changes.

A common source of dispute is when the client believes they have asked for a solution that does one thing only for the freelancer to deliver a solution that does another.

Know who is responsible for when things go wrong.

Meticulously document client requirements and be particularly vigilant when changes creep into a project - as it is easy to lose track of them.

Make sure all changes are costed and signed off. These records will be of immense value in defending against legal claims.

Checking work.

Freelancers are not required to be perfect.

However, this does not relieve them from the obligation to check their work because this is one of the standard systems used to discover and correct errors.

Errors, per se, are not evidence of malpractice, but failure to check the work product is.

Communications with the client.

Many of the claims made by clients are not for serious damages but are based simply on discontent and dissatisfaction with the Freelancer.

This is often brought on by the Freelancers own lack of consideration of the client.

Seemingly minor things such as missing deadlines, lateness to meetings, unavailability by telephone, failure to return emails, and failure to keep the client informed at all times.

With this background of discontent, a real problem such as exceeding the cost or time budgets will trigger an avalanche of serious legal problems.

The best way to keep clients happy is to treat them with respect, keep them informed, and maintain a friendly relationship.

Early recognition of potential disputes.

When issues do arise, dealing with them quickly and professionally can prevent them developing into a major problem.

Burying your head in the sand never makes disputes disappear.

Deal with complaints in an appropriate way and seek advice from a solicitor who understands IT law if your issue escalates.

Most insurers offer a free 24 hour advice helpline, which will put you in touch with experts on how to best handle your situation.

Meeting budgets

  • Costs.

Clients become very dissatisfied and resentful when costs exceed the approved budget.

In such situations, the client may give serious consideration to making claims against the freelancer as well as withholding payments of professional fees.

  • Time.

Overall scheduling of a project should be realistic and should be updated whenever necessary.

Client approvals should be sought all along the way. When the client is counting on use of the project at a certain date, failure to receive it will often be very expensive.

Freelancers must avoid being a contributing factor in schedule slippage by failing to make prompt decisions and delivering work late.

Fees and charges.

Many client dissatisfactions are based on fee disputes.

In some cases this is because the billing is not clear and consistent with the written contract.

All invoices should be rendered on time and strictly in accord with the contract.

If the bill is not paid within a reasonable time, the best thing to do is talk to the client to find out if there is any misunderstanding.

A billing adjustment to satisfy a client at this point will usually be less costly than fighting and paying lawyers later.

PI Insurance

Have an up to date Professional indemnity insurance policy in place.

Litigation is always costly, however big or small your case is.

It makes sense to have an up to date Professional Indemnity Insurance policy to defend your legal position-just in case.

Read the policy wordings carefully and make sure they are relevant to your profession.

Although we may never achieve perfection, we can at least try.

By being constantly alert and aware of the usual sources of errors, we might lessen their occurrence.

From time to time we should stand back and take a good objective look at our operations.

Even minor improvements could prevent or avoid some economically ruinous claims.

These suggestions above are not all-encompassing, but should help you avoid being sued by your client.

 

Published: Monday, 25th Jan 2021
Author: Paige Estritori


Life Insurance Articles

Life Insurance and Estate Planning: What You Need to Know
Life Insurance and Estate Planning: What You Need to Know
Life insurance and estate planning are critical components of financial security. They ensure that your loved ones are protected financially when you are no longer around. By understanding these tools, you can take significant steps to secure your family's future. - read more
The Digital Age of Insurance: Keeping Costs Down with Online Quotes
The Digital Age of Insurance: Keeping Costs Down with Online Quotes
The horizon of the insurance industry has undergone a transformative shift with the advent of digital technology. With a few clicks, consumers can navigate the once-complex world of insurance policies from the comfort of their home. The digital landscape for insurance services offers unprecedented access to information, comparisons, and instant communication, fostering a more empowered insurance client. - read more
Maximize Your Safety Net: Top Tips for Optimizing Income Protection Benefits
Maximize Your Safety Net: Top Tips for Optimizing Income Protection Benefits
Welcome to a pivotal guide dedicated to empowering you with the essentials of income protection insurance in Australia. As we navigate through times of uncertainty, safeguarding your financial wellbeing becomes not just a priority, but a necessity. Income protection insurance stands as one of the key pillars of financial security, ensuring a steady flow of income during periods when you're unable to work due to illness or injury. - read more
Understanding the Role of Life Insurance in Financial Security
Understanding the Role of Life Insurance in Financial Security
Life insurance can seem complex at first, but understanding the basics can help demystify this important financial product. At its core, life insurance is a contract between you and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon your passing, in exchange for premium payments. - read more
Top 5 Reasons to Consider Life Insurance While You're Young
Top 5 Reasons to Consider Life Insurance While You're Young
When you’re young, life is all about new experiences and making plans for a promising future. While factors like travel, career, and relationships often take centre stage, one aspect often overlooked is life insurance. It might seem like something to consider later in life, but starting a policy while you're young can be a savvy financial move. - read more

Insurance News

QBE Faces Legal Action Over Misleading Discount Practices
QBE Faces Legal Action Over Misleading Discount Practices
10 Oct 2025: Paige Estritori
The Australian Securities and Investments Commission (ASIC) has initiated legal proceedings against QBE Insurance, alleging that the insurer misled more than 500,000 customers regarding promised discounts on various insurance products between July 2017 and September 2022. This action underscores the regulator's commitment to ensuring transparency and fairness within the insurance sector. - read more
Debate Intensifies Over Proposed NSW Strata Commission Ban
Debate Intensifies Over Proposed NSW Strata Commission Ban
10 Oct 2025: Paige Estritori
The New South Wales (NSW) government's proposal to ban commissions on strata insurance has ignited a contentious debate between consumer advocacy groups and industry leaders. This reform aims to eliminate potential conflicts of interest and enhance transparency within the strata management sector. - read more
Steadfast Group's Strata Insurance Practices Under Investigation
Steadfast Group's Strata Insurance Practices Under Investigation
10 Oct 2025: Paige Estritori
Steadfast Group, Australia's largest strata insurance broker, is currently under scrutiny following allegations that it misled customers by not disclosing more affordable insurance options from competitors. This situation has prompted the Australian Competition and Consumer Commission (ACCC) to advocate for a ban on commissions within the strata insurance market, citing concerns over undisclosed payments that may be inflating costs for apartment owners. - read more
Jailed Broker Misuses Client Funds for Personal Gain
Jailed Broker Misuses Client Funds for Personal Gain
08 Oct 2025: Paige Estritori
In a significant breach of trust, New Zealand insurance broker in Murray McClune has been sentenced to three years and seven months in prison for embezzling $NZ1.7 million ($1.5 million) from two elderly couples, as reported by the Financial Markets Authority. McClune, a registered financial adviser during 2016-2018, exploited his long-term relationship with his victims by offering fraudulent investment opportunities through his business, Insurance Plus. - read more
icare Under Investigation for Workers’ Compensation Underpayments
icare Under Investigation for Workers’ Compensation Underpayments
07 Oct 2025: Paige Estritori
NSW state insurer, icare, has uncovered approximately 9,400 workers' compensation claims that might have been underpaid due to omitted inflation adjustments. The identification of these potential discrepancies is part of a wider industry review initiated by the State Insurance Regulatory Authority (SIRA). - read more

Start Here !
life insurance
Apply now for your free Insurance assessment and price comparisons!

Start Here

Life Cover Amount:
Postcode:

All quotes are provided free and without obligation. We respect your privacy.

Knowledgebase
Aggregate Limit:
The maximum amount an insurer will pay for all covered losses during a policy period.