Recently The Federal Government announced significant financial penalties for breaches of the Corporations laws and financial misconduct.
Individuals will face fines of up to $945,000 and/or 10 years’ imprisonment and/or a penalty of three times the amount of the benefit derived from the breach.
Companies will face maximum penalties of the larger of $9.45 million, three times the benefit, or 10% of annual turnover.
The Government will also introduce more severe penalties for civil prosecutions.
Following the revelations thus far from the Banking Royal Commission the announcement is not a surprise, and serves as an important reminder for all directors to ensure they have the right processes in place to ensure compliance with all manner of legislative requirements.
The importance of the right level of insurance cannot be overstated, as beyond the risk management approach of seeking to avoid a breach, there remains insurance protection. A Statutory Fines & Penalties insurance cover is one of the most important elements to the insurance program and should include:
Fines against all employees, deemed employees and voluntary workers, not just directors and responsible officers
Protection for the provisions of the OH&S harmonisation legislation and EPA legislation (extends to the broad application of a prosecution under an Act of Parliament)
Initial Investigation coverage, Inquiry Costs, as well as Enforceable Undertakings
Every industry and every business is exposed to the potential of a civil penalty and having the right insurance protection to represent you and your business is vital.