Farm Insurance Australia :: Articles
SHARE

Share this article with your friends!

Risk Management - 8 steps To Avoid Litigation

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.

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.

 

Share this article:


Insurance News

Undisclosed debt agreement results in rejected insurance claim Undisclosed debt agreement results in rejected insurance claim
25 May 2022: .financialservicesonline.com.au

A motorist lost her insurance claim dispute after failing to disclose a debt agreement while renewing her insurance policy. - read more
Australian home insurance in crisis? Australian home insurance in crisis?
19 May 2022: .financialservicesonline.com.au

Warmer temperatures linked to climate change are likely to make home insurance unaffordable for over 500,000 homeowners in Australia by 2030, according to a report from the Climate Council. - read more
AFCA finds MLC failed to give proper notice of rate increases AFCA finds MLC failed to give proper notice of rate increases
19 May 2022: .financialservicesonline.com.au

A dispute ruling against MLC, the Australian Financial Complaints Authority (AFCA) found that the company did not give adequate notice when it raised the critical illness premiums of a policyholder. - read more
Insurance that pays out as soon as extreme weather hits sounds appealing Insurance that pays out as soon as extreme weather hits sounds appealing
18 May 2022: .financialservicesonline.com.au

Australians could soon see a new type of insurance that would pay out as soon as extreme weather hits. - read more
Husband loses insurance dispute over wife's death Husband loses insurance dispute over wife's death
17 May 2022: .financialservicesonline.com.au

A man whose wife’s life insurance policy was revoked after a superannuation death benefit clause change has lost his dispute. - read more

Insurance Articles

How Much Life Insurance Do I Need? How Much Life Insurance Do I Need?
There are many different reasons to purchase life insurance (generation skipping tax, estate plan, estate preservation, surviving spouse needs, planning for your children's future and more). There is no right amount of life insurance, but here are some guidelines that might help you decide how much life insurance you need. - read more
Ambulance Cover: Do You Need It? Ambulance Cover: Do You Need It?
Medicare in Australia doesn't cover ambulance services or emergency transport. These services are more often covered by private health insurance. However, private funds are not the only ambulance and emergency transportation service providers available. - read more
Who Needs Disability Insurance? Who Needs Disability Insurance?
If you are like most people on this planet, you are not financially free. You would not be able to stop working and still support yourself and your family from your financial resources. Your continued ability to work to earn an income would therefore be one of your greatest assets. - read more
Insurance Disputes Insurance Disputes
Just because your insurer has rejected your claim, does not necessarily mean that your case is closed. If you think that you have been unfairly treated, here are some ways to get the insurer decision overturned. - read more
5 ways to control your business insurance costs 5 ways to control your business insurance costs
When it comes to your business insurance, there are a few key things you can do to drive your costs down and ensure you're getting great value.rnTake control of your insurance - it's your business, after all. - read more
DIY Review Checklist for your Income Protection Insurance DIY Review Checklist for your Income Protection Insurance
If you have an income protection insurance plan already - or are thinking about buying one, then you need to be aware that these policies require regular maintenance and careful scrutiny to ensure that they adequately meet your needs. Unfortunately, many people purchase income protection insurance policies only to find out about their shortcomings at claim time. - read more
Public Liability, Product Liability and Professional Indemnity Insurance Public Liability, Product Liability and Professional Indemnity Insurance
Business liability insurance provides protection for your business against the cost of litigation and claims resulting from third party damages or bodily injuries caused due to negligence of your business. In this article we examine the three main types of business liability insurances and how they may apply to your business. - read more
Life Insurance: How much is enough? Life Insurance: How much is enough?
When considering life insurance, you're planning and preparing for an event that most of us would rather not think about. But life insurance represents a critical step in managing your personal finances and ensuring your family's well-being. - read more
Business Insurance Policy and the Importance of the Business Description Business Insurance Policy and the Importance of the Business Description
Does your insurance company really know what it is your business does? This article will help you to understand the importance of the business description and how it can help to avoid any nasty surprises should you need to make a claim. - read more
5 Tips for Dealing With your next Insurance Claim 5 Tips for Dealing With your next Insurance Claim
Sometimes processing an insurance claim after a catastrophic event can turn into a nightmare. This article contains some pointers on how to handle the bureaucracy and confusion that can occur when filing a claim. - read more

Need a Quote?
Start your free farm insurance quote comparison here.
Farm Type:
Postcode:

Knowledgebase
Professional indemnity:
An insurance that provides cover for liability incurred in the course of exercising a profession.