As a Director or Officer, you have a large responsibility on your shoulders to run your business properly and look after your partners and employees. But sometimes things go wrong, often out of your control. Claims can be made against you by employees, competitors, shareholders, and clients. If you don’t have the right cover, you could potentially lose everything including your business and personal and family assets.

There has been a continued and consistent increase in the number, type and severity of employment practices claims that are being brought against Australian companies.

As this number continues to increase, are you protected?

Management Liability Insurance gives you peace of mind to build your business with confidence so that you can focus on what’s important.

What is Management Liability Insurance?

Management Liability Insurance protects the personal assets of Directors and Officers against legal liability that can be brought against you personally through managing a business. In addition to covering individuals, it also protects your business against a range of claims.

This type of insurance is popular for Propriety/Private Companies.

Please note: Management Liability Insurance includes Directors and Officers Insurance.

How does Management Liability Insurance differ from Professional Indemnity Insurance?

Management Liability covers you against allegations you mismanaged your company.

Professional Indemnity protects you against claims from clients and third parties regarding professional advice or services you’ve provided.

Who needs Management Liability Insurance?

You should consider it if you sit on the board of a proprietary/private company or any business.

Claims against you and your company can include fraud, harassment, bullying, unfair dismissal, discrimination, breach of duty, defamation, occupational health and safety penalties, and even theft by employees or contractors.

What does Liability Insurance cover?

  • Damages and claimant costs awarded against you,
  • Legal costs,
  • Investigation costs,
  • Civil fines and penalties.

It’s a packaged product that generally includes protection against the following management liability risks:

Directors and Officers Liabilities

Protects past, present and future Directors and Officers plus anyone else involved in the management of a company for claims of wrongful acts. Claim examples include unfair competition, fraud, manslaughter and insolvent trading.

Employment Practices Liabilities 

Covers the company, Directors, Officers and employees for claims made by current, past and future employees. Claim examples include bullying, harassment, unfair dismissal and discrimination.

Statutory Liabilities 

Covers individuals and the company for fines from operating the business including workers compensation and occupational health and safety fines. Claim examples include OH&S fines, environmental fines and civil penalties.

Crime Cover 

Covers the company for loss from dishonest acts including theft and fraud by your employees.

Corporate Entity Liabilities 

Covers the company for mismanagement allegations such as fraud and shareholder disputes. This is extremely important for companies owned by Directors involved in the business because a claim made against the company is often also made against the owner or Director.  Claim examples include wrongful acts, fraud and shareholder disputes.

Plus, it covers:

  • Representation costs where you’re legally required to attend an inquiry or investigation regarding company affairs,
  • Additional management exposures include tax investigation, public relations and crisis management.

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.