Management Liability Insurance

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What is management liability insurance?

What does management liability insurance cover?

What won’t management liability insurance cover?

Do I need management liability insurance?

Choosing a policy for your business

What other cover can be included in my management liability policy?

What’s the difference between management liability and professional indemnity insurance?

Where can I compare management liability insurance?

Long story short

Management liability insurance isn’t compulsory, but could be worthwhile

Whether you need it depends on factors like business size, risk, and public exposure.

This cover may help protect businesses and leaders from claims of wrongdoing

You could get coverage for claims like unfair dismissal, harassment, or employee theft.

Policies typically exclude intentional acts, accidental injury claims, and insolvency issues

Other exclusions could include environmental hazards and breaches of professional duty.

What is management liability insurance?

Management liability insurance protects businesses and their directors or officers against claims of wrongdoing in managing the business. If things go wrong, this insurance can help reduce the damage.

Management liability insurance isn’t compulsory in Australia, but it could still be a smart for you and your business decision. It’s pretty impossible to control every contingency, and it’s hard to put a price on peace of mind.

What does management liability insurance cover?

This type of cover is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business. It will typically cover your business if you have losses resulting from:

Depending on the situation, your management liability insurance might cover your business losses, legal fees if you need to appear in court, and any resulting judgment amounts your business is ordered to pay.

What won’t management liability insurance cover?

Every policy has exclusions. Management liability Insurance typically won’t cover the following:

Some of these areas could be covered by other types of insurance you already have, such as public liability insurance and professional indemnity insurance.

As with all forms of insurance, it’s a good idea to take a careful look at the policy wording or product disclosure statement (PDS) of any policy you’re considering to help you understand exactly what’s covered.

Helpful tip

When deciding on the level of cover think about the specific risks your business faces, the associated legal costs to defend it and any potential fines and penalties you may incur. Management liability gives you extra peace of mind when you navigate through an increasingly litigious environment with defense costs, including legal fees, that can possibly increase the cost of a claim.

Jane Mason

Former Head of Product, Channels & Risk at BizCover

Do I need management liability insurance?

The short answer is – it depends. Management liability insurance isn’t compulsory, but it could be a useful addition to your business, depending on your circumstances.

To help you decide, it’s worth considering what your level of risk is. Some of these questions might help you get started:

• How big is your management team?
• How many staff members do you employ?
• What level of public exposure does your business have?
• Does your business have clear guidelines relating to work health and safety, sexual and other harassment, and bullying?  

Choosing a policy for your business

So, you’ve decided management liability insurance is a good idea for your business. Now what? We’ve compiled a handy checklist with the main things you should consider before deciding on a policy.

What other cover can be included in my management liability policy?

Management liability is a package policy, where inclusions will vary based on the insurer. You might find that some management liability policies can also cover:

• employment practices liability
• tax audit costs
• cyber and privacy liability
• officers, trustees and directors’ liability
• private capital raisings. 

What’s the difference between management liability and professional indemnity insurance?

We get it. With so many different types of insurance available for businesses, it can be hard to understand how they differ.

Professional indemnity insurance protects businesses if they become liable for costs arising from their professional advice. It might cover situations like:

• failing to deliver a product as planned
• giving advice that leads to loss or injury
• mistakes such as miscalculations, poor legal advice or medical negligence.

Management liability insurance, on the other hand, is intended to protect managers and directors of businesses for liabilities resulting from the management of a business.

Where can I compare management liability insurance?

Ready to take the leap? We’ve partnered with BizCover to help you compare management liability policies online. Start comparing now.