What is Management Liability Insurance?

Business Insurance

A management liability policy is protection for directors, owners and executives of a company plus the company itself against exposures involved with managing the firm.

Being the owner or executive level manager in a company carries with it responsibilities. If there is an alleged or actual wrongdoing, a director, officer or owner of a company can be held personally liable.

Management Liability Insurance Explained

Management Liability Insurance covers the following people and assets of a company:

  • Directors and Officers (This is the primary cover)
  • Company/Entity Cover
  • Employment Practices Liability
  • Trustees Liability
  • Crime Cover
  • Statutory Liability
  • Tax Audit

Directors and Officers

Management Liability Insurance protects past, present and future directors and officers plus management for claims alleging a wrongful act. These acts may include fraud or a breach of fiduciary duty, misappropriation of trade secrets, unfair competition and insolvent trading.

Company/Entity Cover

If directors are owners of the company, the policy protects the company against actions relating to management issues. Claims may include fraud or wrongful act and shareholder disputes.  

Employment Practices Liability

Provides cover to the company, directors, officers and employees for claims that may be made by current, past and prospective employees. Claims may relate to employment practices, bullying, harassment, unfair dismissal and discrimination.

Trustees Liability

The policy provides cover to the company, directors, officers and employees against claims for alleged wrongdoings. Claims could relate to superannuation trustees for breach of fiduciary duty and wrongful administration.

Crime Cover

The crime cover relates to cover to the company for loss arising from dishonest acts such as theft (of cash and stock) and fraud by employees, contractors and consultants.

Statutory Liability

Some individuals and the company are provided cover for fines and penalties relating to occupational health & safety, EPA and civil penalties.

What does Management Liability Insurance Cover?

  • Damages awarded against you
  • Legal costs
  • Investigation costs
  • Civil fines & penalties.

Who can bring an action against a company?

The following organisations and groups of individuals can bring an action against a company plus its directors, officers and employees:

  • Government Regulators ie ACCC, ASIC, WorkSafe & the ATO,
  • Employees
  • Competitors
  • Creditors
  • Shareholders (especially minority shareholders)
  • Clients
  • Liquidators/Administrators

Call Phoenix Insurance Brokers on (08) 9367 7399 to speak to a consultant experienced in Management Liability Insurance cover to find the best policy for your organisation.

Category: Business Insurance