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Management Liability Insurance is a type of insurance designed to protect the personal assets of the directors, officers, and managers of a company, as well as the financial well-being of the company itself, against the costs associated with defending against claims related to management decisions and actions.
What is Covered:
Management Liability Insurance typically provides coverage for:
Directors' and Officers' Liability: Protection for claims made against the personal liability of company directors and officers.
Company Reimbursement: Reimbursement to the company if it has paid the claim of a director or officer.a
Employment Practices Liability: Coverage for claims made by employees alleging wrongful acts in the management of the employment relationship, such as wrongful termination, discrimination, or harassment.
Statutory Liability: Protection for fines and penalties that may be imposed on the company or its managers for unintentional breaches of certain laws.
Defence Costs: Legal fees associated with defending against claims, even if the claims are groundless.
What is Not Typically Covered:
While Management Liability Insurance provides broad protection, there are exclusions. These typically include:
Intentional Illegal Acts: Any deliberate illegal acts or intentional regulatory breaches by company leaders are not covered.
Known Claims: Claims or circumstances that were known prior to the inception of the policy are typically excluded.
Bodily Injury and Property Damage: Claims related to physical injury or property damage are generally not covered under this policy and require separate coverage.
Contractual Liabilities: Liabilities assumed under a contract beyond what would be imposed under common law are generally not covered.
Insured vs. Insured Claims: Claims made by one insured party against another insured party under the same policy are often excluded.
Creditors' Claims: Claims made by creditors of the company are typically not covered.
Professional Services: Claims arising from the provision of professional services, which are typically covered under Professional Indemnity Insurance.
The Broad Risk Difference
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With over 15 years of experience, we specialise in delivering tailored advice and solutions to protect your business. We customise our offerings to your unique needs, ensuring comprehensive coverage and peace of mind.
Frequently Asked Questions
1. What is Management Liability Insurance?
Management Liability Insurance is a type of insurance designed to protect the personal assets of the directors, officers, and managers of a company, as well as the financial well-being of the company itself, against the costs associated with defending against claims related to management decisions and actions.
2. Who needs Management Liability Insurance?
Any business with a board of directors or executive officers can benefit from Management Liability Insurance. This includes private companies, non-profit organizations, and small to medium-sized enterprises.
3. What does Management Liability Insurance typically cover?
This insurance generally covers legal fees, settlements, and compensation costs for claims of wrongful acts in managing a company, such as breaches of fiduciary duty, employment practices liability, statutory compliance issues, and more.
4. What is not covered by Management Liability Insurance?
Exclusions can include intentional illegal acts, known claims prior to the policy start, bodily injury and property damage claims (which are typically covered by other policies), contractual liabilities, and claims between insured parties under the same policy.
5. How much does Management Liability Insurance cost?
The cost of Management Liability Insurance varies depending on factors such as the size and type of the business, the industry sector, claims history, and the level of coverage required.
6. Can a claim be made against a director after they have left the company?
Yes, claims can be made against former directors and officers for actions that took place while they were in their position. Management Liability Insurance can provide cover for past directors and officers as well as current ones.
7. Is Management Liability Insurance the same as Directors and Officers (D&O) Insurance?
Management Liability Insurance is broader than D&O Insurance as it includes coverage for the company itself, not just individual directors and officers. It often includes employment practices liability and other coverages not typically found in a standalone D&O policy.
8. How can I determine the right level of Management Liability Insurance for my business?
It's best to consult with an insurance broker or professional who can assess your business's specific risks and recommend an appropriate level of coverage.