Management Liability Insurance

Management Liability Insurance ADVICE AT YOUR FINGERTIPS
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What is Management Liability Insurance?

Management Liability Insurance has risen in importance over the last 10 years as a way for small and medium businesses to protect its assets against management claims by employees, shareholders, and government departments for dishonest and/or negligent actions from its directors, management team and even employees.

Directors and Officers Liability Insurance has been around for years as a way to cover actions against the Directors and Officers and their individual assets. However, Management Liability Insurance fills the gaps in liability risks, protecting your balance sheet against any claims made against the business.

Management Liability Insurance can help your company survive the unexpected, with minimum losses.

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What Risks May A Management Liability Policy Cover?

Management Liability Insurance covers the decisions made by people involved in managing and running an organisation.

There is a range of circumstances that a Management Liability policy may cover. Examples include:

  • A manager is dating an employee and decides to promote that employee. Even if the employee in question was the best fit for the role, this can be seen as a conflict of interest, and another employee may take legal action as a result. Depending on the circumstances, Management Liability insurance may cover the company’s legal fees.
  • Unbeknown to the CEO, a CFO misrepresents income and expense figures on the company’s financial statements to influence current financial results. The CEO may be covered for legal defence costs under a Management Liability policy.
  • A manager fires an employee without giving him the necessary warning according to his contract. As a result, the manager is taken to court on an unfair dismissal charge. Management Liability insurance may cover defence costs and any compensation payout.
  • A firm’s accountant doctors account records and statements to embezzle money from the company. Management Liability Insurance may cover the costs associated with taking legal action against this employee.

What Risks May a Management Liability Policy cover?

Management Liability Insurance is a broad policy, but typically includes cover for:

  • Directors And Officers Insurance: for claims against the business or against specific board members or management
  • Company Reimbursement: for costs incurred by a director or officer if they are legally required to attend an inquiry
  • Company Liability: for claims against the business or business operations
  • Trustee Liability: to protect directors and officers against claims of alleged breach of trust, breach of duty and negligent acts while managing a trust.
  • Employment Practice Liability: for claims that include wrongful termination, discrimination, invasion of privacy, sexual harassment, false imprisonment, emotional distress, and breach of contract violations
  • Fidelity: cover against losses resulting from the dishonest actions of employees
  • Business crisis consultant fees: cover for the costs incurred to engage specialist consultants to assist in a business crisis
  • Representation costs in respect of an occupational health & safety investigation
  • Direct Financial Loss.

A Management Liability insurance policy is only worthwhile if it will respond to a claim. Claim ratios for Management Liability Insurance can be relatively high and payouts can range from the tens of thousands of dollars, hundreds of thousands and even millions of dollars.

It’s therefore imperative when searching for Management Liability Insurance to find a policy with suitable cover, backed by a solid insurance company.

Who needs Management Liability Insurance?

Management Liability Insurance is designed specifically for private businesses (not publicly-listed on the stock exchange) to protect their assets. Increasingly, Management Liability Insurance has become an important part of any Business Insurance program.

Typically claims against the management of a business are based on allegations of negligence by the management. A claim could be made against your management, your business, or both which makes it critical to cover both with a robust Management Liability Insurance.

How PSC Direct works for you

As specialist small business insurance brokers, PSC Direct uses our considerable experience to provide multiple quotes for you. Combining our expertise insuring thousands of other similar businesses with our detailed database of insurers and insurance products; we’re best placed to advise you on the right insurance for your business.

We have strong relationships with the leading underwriting agencies and insurance companies. We can source the most appropriate business insurance policy for you, covering you for what you really need, at the right price.

We can help sole practitioners, small, medium and large businesses protect the businesses you are growing and ensure your assets are covered in the event that disaster strikes.

With our strong relationships to a broad range of highly-rated insurers we are able to advise you on business insurance, professional indemnity insurance, and professional indemnity insurance specifically tailored to meet the risk exposure of your business.

We can also provide advice on a range of additional insurance policies and cover that can affect your business and make sure you have the right insurance at the right price.

72% of Australian businesses fail after experiencing a major loss. 

The right business insurance will ensure you are not one of them.

While good insurance covers you for most things – Professional Indemnity, Professional Liability and Property, great insurance covers you for the specific risks that your business faces. We understand that every business is unique and you need a policy that addresses the specifics. We make sure that when you have a claim that’s out of the ordinary and complicated, you’re covered.