What is Management Liability Insurance
Everyone loves a surprise, except when you are a company director. If you own or are involved in the management of a company, you carry specific responsibilities which may leave you personally liable for any ‘unwelcome surprises’. And no-one loves risking their personal assets!
The changing regulatory environment in Australia has increased the operating risk for businesses of all sizes. As a Company director, officer or senior manager, you need to be on your A-game all the time to protect the financial wellbeing of the company and your personal wealth. Management Liability Insurance protects the company and the individuals who undertake these vital roles within the business against the risks and exposures associated with running the company.
Where Professional Indemnity Insurance covers the advice or service you provide to your clients, Management Liability Insurance covers the act of running your business. A Management Liability policy will protect your business and personal assets against legal costs for allegations of mismanagement, misconduct or legislative breaches.
- OH& S dramas
- Unfair Dismissal
- Sexual Harassment
- Statutory breach of duty
- Statutory fines & penalties
A Management Liability Policy can cover
Management Liability – which includes protection against fraud or breach of fiduciary duty; misappropriation of trade secrets; unfair competition and breach of confidentiality.
Corporate Liability – which protects against allegations of fraud, being prosecuted by a regulatory authority and actions for breaches of the Corporations Act.
Employment Practices Liability – which protects against allegations of bullying, sexual harassment, unfair dismissal and discrimination.
Theft/Crime – by employees which may include theft of money and property.
Statutory Liability – which protects against a breach of Occupational Health and Safety Act and other legislation.
With potential penalties that range from hefty fines, all the way through to disqualification and possible imprisonment, there is a clear need for an effective and immediate way to protect yourself.
You’ve done the hard yards to get a top spot in a company (nice work), is it worth risking all the blood, sweat and tears by not having the right Management Liability Insurance in place?
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What is included?
- Damages and claimant costs awarded against the insured
- Legal and defence costs
- Claims investigation costs
- Some civil fines & penalties
What is typically NOT covered?
- Bodily injury and property damage
- Dishonesty/criminal action
- Known claims and circumstances
Get the cover that is right for you
With BizCover you can choose policies with cover between $1m to $5m. When deciding on the level of cover you for your business you should think about:
- The specific risks your business faces and the associated legal costs to defend your business, potential fines and penalties appropriate to any breaches and the costs that could be awarded to any claimants.
Management Liability Insurance benefits:
- Private companies
- Company directors and senior management teams
- Any company that has more than 2 employees
Could this happen to you?
Unwelcome surprises are unfortunately a consequence of managing a company, no matter how hard you try to avoid them. Claims arise when alleged or wrongful acts occur and here are a couple of examples:
A female employee lodged a claim against her supervisor at a well-known sports club, for allegedly touching her and passing inappropriate comments. She refused to return to the club after reporting the incident on the grounds that she was suffering from depression as a result of the sexual harassment. The matter was settled out of court and the Insured was covered for the $75,000 settlement payment.
Constructing a claim
During the construction of a commercial property, an employee was severely injured and left paraplegic when a pile of debris accidentally fell on him. The company was subject to a full Occupational Health and Safety investigation and prosecution. The Company vigorously denied and successfully defended all allegations. Despite their attempt, the Company was fined $155,000 and incurred $100,000 in legal costs, which were covered by the Insurer.
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