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The management team of your business is a valuable asset; it’s what keeps things running smoothly and how most challenges are overcome. With a managerial position comes a great deal of responsibility and, when things go wrong, the blame can fall on business’ directors or senior leaders.
As a company director, officer, senior manager or someone that holds another managerial position in a business, you may be personally liable for those certain little bumps in the road - that could lead to big financial scars!
Management liability insurance* can protect directors and officers and the insured company itself from the many exposures relating to the management of a company. Owners and those responsible for the management of a company have specific responsibilities which can result in personal liability for alleged or actual wrong doing.
Before purchasing a policy, it’s always important to read the policy wording and Product Disclosure Statement (PDS) to get a better understanding of any limitations and exclusions.
Even the most competent managers sometimes make mistakes and are put in the spotlight. Management liability insurance can protect your business and personal assets against the legal costs associated with allegations of mismanagement, misconduct and legislative breaches.
Allegations against management can come from both customers and employees, and may include:
All above scenarios can cause distress for a business owner but being prepared can ease the worry and place your business in a stronger position to deal with some claims made against management.
Your level of coverage will vary between providers and policies, so it’s important you find the cover that’s appropriate for your business.
Below are some of the situations that are generally not covered by a typical management liability policy:
Management Liability policies can come as a package and include other types of cover for extra protection. You might find that some policies can also cover1:
While taking out management liability insurance is not mandatory by law, particular businesses may find this Business insurance product especially important.
The following questions could help you get a better idea of its suitability for your business:
Professional Indemnity (PI) and Management Liability (ML) insurance can sometimes be confused. With so many insurance types available for businesses, it’s difficult to know which may be suitable for your business.
Professional Indemnity (PI) insurance* is a form of protection for businesses that provide specialist services or professional advice. It is designed to help respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice. PI Insurance could also assist with the legal costs associated with responding to or managing claims which are covered by the policy.
On the other hand, Management Liability insurance* is designed to help provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.
It’s a good idea to assess your business and its risk level to ensure you have a sufficient level of protection against a wide range of circumstances that may arise.
iSelect has partnered with BizCover to help you compare business insurance policies online. Get started comparing online or call today on 13 19 20.
*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
Last updated: 18/12/2019