Management Liability Insurance
What is management liability insurance?
Management liability is designed to protect those in charge of running a business – directors, managers and officers, for example – from potential claims as a result of their actions or decisions.
When running a business, you have a duty to ensure you uphold to the laws and regulations enshrined in the Corporations Act. In instances where there are either alleged or actual breaches of the Corporations Act, management liability responds to cover the costs involved with defending such claims.
Who should consider it?
Management liability should be a consideration for all businesses that could be potentially exposed to claims from employees, regulatory bodies and other stakeholders .
Hence, it is not only large companies that could be exposed to these claims, as small to medium business owners and officers may also be at risk. Additionally, all types of businesses should strongly consider taking out a management liability policy to protect themselves if they are faced with a claim resulting in unexpected and considerable liability costs. In these situations, management liability can protect your business and personal assets, such as your home, from being sold to cover the costs of paying the claim.
What can it cover?
To give you an overview of the various covers and benefits your management liability policy may include, see below:
- Employment practice liability – Covers payouts for claims of employment breaches, such as wrongful dismissal, bullying or discrimination.
- Directors’ and officers’ liability – Designed to protect your Pty Ltd company’s directors, officers and managers, both past, present and future.
- Specifically, protects these individuals against claims of wrongful acts, such as misrepresentation or breach of duty (subject to business size).
- Crime – Protects your business against claims such as employee or third-party fraud (not all criminal activity is covered).
- Corporate liability – Covers costs that your business would incur if you needed to defend and settle claims from outside parties alleging wrongful conduct, as well as investigation into the affairs of the company.
- Statutory liability Covers – the cost of defence, fines and penalties under some statutes e.g. Work Health and Safety (fines under Work Health and Safety cannot be covered by insurance in NSW).
- Defence costs – Covers your legal costs if your business ends up in court.
What usually isn’t covered?
Exclusions and the excess you need to pay can vary greatly depending on your insurer. Generally, your policy won’t cover:
• Cyber crime, unless specifically set out in your policy (you can get cover extensions in some cases).
• Employee entitlements.
• Property damage or bodily injury.
There are other exclusions which a Wymark representative can outline for you. To contact Wymark Insurance Broker please see our contact us page.
Important note – the information provided here is general advice only and had been prepared without taking into account your objectives, financial situation or needs.