Management Liability Insurance protects Directors and Officers for legal liability they may incur personally in managing a corporation, it also extends to the corporation itself for certain types of claims. Private companies and their directors continue to face greater corporate governance and increasing regulatory surveillance of the management of their business activities. When you’re running a business, you may be personally liable for any actual or alleged breaches. And it’s not just large companies that are exposed – small and medium business owners and officers could be at risk as well.
Why is it Important?
If you are faced with unexpected liability costs, Management Liability Insurance can protect your business and personal assets, such as your home from being sold to cover the cost of paying claims.
Did you know?
Many businesses think it won’t happen to them, but statistics show otherwise. In fact,
- the likelihood of a claim that could be covered by a Management Liability policy has tripled in the last 5 years, with 50% of notifications resulting in a claim
- the most common claims are for employment practices like bullying, harassment and wrongful dismissal
- major claims by amount relate to crime – including employee fraud
Types of Cover
Management Liability Insurance policies vary in the benefits they provide. Cover can include:
- Directors and Officers Liability – Covers your proprietary limited company’s past, present and future Directors and Officers against claims of wrongful acts such as misrepresentation or breach of duty
- Corporate Liability – Covers costs that your business would incur if you need to defend and settle claims from outside parties alleging wrongful conduct, as well as investigation into the affairs of the company
- Employment Practices Liability – Covers the Company for claims alleging an employment breaches including wrongful dismissal, discrimination, harassment, deprivation of career opportunity, breach of contract etc
- Statutory Liability – Covers the cost of defence, fines and penalties under some statutes (e.g. Work health and Safety)
- Trustee Liability – For trustees of staff superannuation fund
- Fidelity/Crime – Covers the company for theft by its employees
- Business Crisis Consultant Fees and Defence Costs – Covers your legal costs if your business ends up in court
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