Management Liability Insurance
Management Liability Insurance
Managers and Directors face significant pressure to manage a business effectively and may be held accountable by various stakeholders, including partners, employees, clients, and shareholders.
In the event of a claim against a company director or manager from within or outside the organisation, the resulting legal costs and damages can be substantial. Without adequate coverage, you risk not only your business but also your personal and family assets.
Do I Need Management Liability Insurance?
If you serve on the board of a private company or any business, it’s wise to consider obtaining Management Liability Insurance.
The likelihood of an incident occurring is unpredictable, and the resulting legal fees can be financially overwhelming. Ensuring you have adequate coverage is essential to protect yourself.
Claims against you or your business could encompass:
- Bullying
- Breach of Duty
- Defamation
- Discrimination
- Fraud
- Harassment
- Occupational Health and Safety
- Theft by employees or contractors
- Unfair dismissal
What Does This Insurance Cover?
Management Liability Insurance is commonly sought by private companies and typically covers the following risks.
Please note that Management Liability Insurance includes Directors and Officers Insurance.
For each risk covered by your policy, you will generally be protected against:
- Damages and claimant costs awarded against you
- Legal fees
- Investigation expenses
- Civil fines and penalties
- Representation costs for legal inquiries or investigations related to company matters
Directors and Officers Liabilities
This covers past, present, and future Directors and Officers, as well as anyone involved in the management of the company, for claims related to wrongful acts. Examples of such claims include unfair competition, fraud, manslaughter, and insolvent trading.
Employment Practices Liabilities
Provides coverage for the company, its Directors, Officers, and employees against claims made by current, past, and future employees. Examples include bullying, harassment, unfair dismissal, and discrimination.
Statutory Liabilities
Covers individuals and the company for fines associated with business operations, including workers' compensation and occupational health and safety violations. Examples include OH&S fines, environmental penalties, and civil fines.
Crime Cover
Protects the company from losses due to dishonest acts such as theft and fraud committed by employees.
Corporate Entity Liabilities
Covers the company against allegations of mismanagement, including fraud and shareholder disputes. This is particularly crucial for companies owned by Directors, as claims against the company often extend to the owners or Directors. Examples include wrongful acts, fraud, and shareholder disputes.
Important Tips
- Please note that not all liabilities by a Director or Officer impact the company itself.
- Managers and employees can also be liable in addition to Directors and Officers.
- Directors and Officers are often unaware of their full regulatory responsibilities due to the constantly changing environment.
Note - Management Liability Insurance is different from Professional Indemnity Insurance.
- Management liability Insurance covers you against allegations you mismanaged your company.
- Professional Indemnity Insurance protects you against claims from clients and third parties regarding professional advice or services you’ve provided.
General Advice Warning
The information provided on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice on this website is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making a decision based on this advice you should consider whether it is appropriate to your particular circumstances.
Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a disclosure document, including the Product Disclosure Statement (PDS) and, where available, Target Market Determination (TMD) relating to the product and consider the content before making any decision about whether to acquire the product.
Authorised by Clearlake Insurance Brokers ABN 16 651 113 861 AFSL 559829
How Clearlake Insurance can help
For more information or to arrange cover, please contact us on 02 9037 8970 or simply fill out the form below and one of our insurance brokers will get in touch shortly.