Farm Insurance :: 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

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

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.

 

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

Rate this article

0 Comments

No comments yet. Be the first to share your thoughts.


Insurance News

Why Repair Bottlenecks Matter for Farm Insurance Claims
Why Repair Bottlenecks Matter for Farm Insurance Claims
02 Sep 2026: Paige Estritori
Fresh industry concern about repair delays after severe weather is highly relevant for Australian farms, where a damaged shed, washed-out access track or unavailable part can quickly interrupt day-to-day operations. While the wider insurance discussion often focuses on homes and commercial buildings, the same pressure points can be even more complex on rural properties because assets are spread out, specialist equipment is involved and local contractor availability may be limited. - read more
Insurance Tax Debate Puts Farm Premiums Back in Focus
Insurance Tax Debate Puts Farm Premiums Back in Focus
26 Aug 2026: Paige Estritori
Renewed industry pressure to reduce insurance taxes has put affordability back in the spotlight for rural and regional Australia. The latest debate centres on the extra costs added to insurance through state-based duties, levies and other charges, which can make already expensive cover harder to maintain for households and businesses exposed to flood, bushfire, storm and cyclone risk. - read more
Why Claims Disputes Should Prompt a Farm Insurance Review
Why Claims Disputes Should Prompt a Farm Insurance Review
19 Aug 2026: Paige Estritori
Recent complaints data from the Australian Financial Complaints Authority has again highlighted a pressure point that matters to rural Australia: insurance claims can become difficult when expectations, policy wording and evidence do not line up. While the figures cover the wider insurance market rather than farms alone, the themes are highly relevant for agricultural businesses dealing with storm damage, fire losses, machinery failures, fencing repairs or interrupted operations. - read more
Wetter Weather Forecast Puts Rural Cover Under the Microscope
Wetter Weather Forecast Puts Rural Cover Under the Microscope
12 Aug 2026: Paige Estritori
Australia's latest seasonal weather signals have again pushed rainfall risk into the foreground for rural and regional businesses. While conditions vary sharply between districts, a wetter outlook for parts of the country is a useful reminder that risk planning should not wait until paddocks are already saturated, creek crossings are cut or machinery is bogged at harvest. - read more
Underinsurance Warning Lands at a Critical Time for Farms
Underinsurance Warning Lands at a Critical Time for Farms
04 Aug 2026: Paige Estritori
Fresh insurance industry concern about underinsurance is especially relevant for Australian farmers as rebuilding and replacement costs remain stubbornly high. While the issue is often discussed in relation to houses, the same pressure applies across rural assets: sheds, fencing, pumps, tanks, grain storage, livestock yards, irrigation equipment and machinery can all cost significantly more to replace than they did when a policy was first arranged. - read more
Why Climate Risk Is Back on the Farm Insurance Agenda
Why Climate Risk Is Back on the Farm Insurance Agenda
28 Jul 2026: Paige Estritori
Australia's general insurance sector has again put natural hazard resilience at the centre of the affordability debate, with fresh industry commentary warning that floods, bushfires, storms and cyclones are continuing to reshape how risk is priced. For farmers, this is not an abstract policy discussion. It goes directly to the cost and availability of farm insurance, particularly for properties with older buildings, exposed machinery, flood-prone access roads, boundary fencing, stored fodder or high-value livestock. - read more

Farm Insurance Articles

Livestock Insurance for Australian Farmers: What to Know Before Choosing Cover
Livestock Insurance for Australian Farmers: What to Know Before Choosing Cover
Livestock insurance can help Australian farmers manage the financial impact of unexpected animal losses caused by events such as disease, accidental death, theft, transit incidents or extreme weather. The right policy settings depend on the type of livestock, the risks faced by the farm, how animals are valued and the exclusions that apply. - read more
Is Your Farm Under-Insured? Tips for Assessing Bushfire Insurance Adequacy
Is Your Farm Under-Insured? Tips for Assessing Bushfire Insurance Adequacy
The threat of bushfires looms large over the vast expanses of rural Australia, shaping the reality of farming in this sunbaked landscape. The risk, always present, escalates as the climate warms and dry conditions persist. It's not a matter of if, but when the land will be tested by fire's wrath. In this environment, the armor of insurance isn't just recommended; it's critical for survival. - read more
The Farmer's Handbook to Quick and Effective Insurance Claims
The Farmer's Handbook to Quick and Effective Insurance Claims
Insurance is a vital part of safeguarding any farming operation. As a farmer, protecting your property, equipment, and livelihood from unexpected events like natural disasters, theft, or accidents is crucial. Adequate insurance coverage ensures that you can recover quickly from setbacks without enduring overwhelming financial strain. - read more
Essential Coverage vs. Optional Add-ons: Balancing Protection and Costs
Essential Coverage vs. Optional Add-ons: Balancing Protection and Costs
For Australian farmers, having the right insurance coverage isn't just a safety net—it's an integral part of sustaining their livelihood. Natural disasters, unpredictable climate conditions, and the inherent risks of agricultural production underline the critical importance of robust insurance for the agricultural community. As farmers navigate the complexities of insurance, understanding the basics becomes the first step toward securing their assets and ensuring the continuity of their operations. - read more
Farm Insurance, Workers Compensation and Contractor Risks in Australia
Farm Insurance, Workers Compensation and Contractor Risks in Australia
Australian farms that use employees, contractors, seasonal labour, family help or volunteers need to understand how workers compensation, public liability and contractor insurance can interact. This article explains the key insurance issues to review, why state and territory rules matter, and what farm operators should check before people start work. - read more
Farm Succession Planning for Rural Australian Families
Farm Succession Planning for Rural Australian Families
Farm succession is the planned transfer of farm ownership, management and knowledge from one generation to the next. For rural Australian families, it can involve complex family, legal, financial and operational decisions, so starting early and using a structured process can help reduce uncertainty. - read more

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

All quotes are provided obligation-free by a participating broker from our national referral partner network. We respect your Privacy.


Knowledgebase
Term Life Insurance:
A life insurance that provides a cover for a specific period of time - usually one to five years or until the insured reaches age 65 or 70.