Find out whether your existing policy responds before assuming a dispute must be funded entirely by the business.
Corporate Recovery Partners
01 / 06
An allegation arrives with a legal bill
An engineering consultancy receives a letter alleging errors in its design. The director starts arranging a private response, then remembers the business has insurance. The policy might help, but its scope, notification requirements and conditions need checking before the director commits to a defence or settlement.
Gather the schedule, wording, endorsements and renewal history relevant to the work and allegation. A broker’s summary or the label on a premium invoice is not enough.
Business.gov.au explains that insurance policies have defined cover, exclusions and conditions. Different business risks may require different cover, so do not assume every commercial disagreement is insured.
Contact the insurer or broker with the demand and a factual timeline. Government guidance recommends contacting an insurer as soon as possible when making a claim and checking applicable time limits.
Ask for written confirmation of the notification, the reference number and anything else required. Report the facts accurately without treating your own assessment as a coverage decision.
Ask whether legal representation, defence expenses or settlement require the insurer’s approval. Confirm any excess and what costs the business may still need to meet.
Before admitting liability, agreeing compensation or appointing additional advisers, obtain guidance on the policy conditions. The insurer’s involvement does not remove your need to understand the allegation and preserve records.
If cover is declined or limited, request the reasons and relevant wording. Business.gov.au outlines an insurer complaint process and possible external dispute resolution for eligible matters.
Seek appropriate advice on coverage and the underlying claim. Keep formal legal response dates under review while insurance questions are being resolved.
Send the policy documents, claim letter and factual chronology to the insurer or broker. Ask what immediate actions are required and who is authorised to manage the response.
Record the coverage position, uncovered costs and next deadline. Preserve correspondence and do not assume silence means the claim has been accepted.
Call CRP today about debt recovery and coordinating the appropriate professional support.
