Why do you need Management Liability insurance?
A Company and its directors, officers and senior managers need Management Liability insurance because they face both corporate and personal liabilities which can arise from Claims made against them by numerous stakeholders, including but not limited to:
- Regulators (such as ASIC and the ACCC).
- Liquidators /Administrators.
When a breach of company law or regulation occurs or is alleged to have occurred, the focus is on your conduct or alleged conduct as a director, officer, senior manager and as a Company. Even where a Claim appears to be completely baseless or without merit, it will still cost you time and money to successfully defend the Claim.
These exposures associated with managing a business are vast and numerous. The majority (if not all) companies insure against their legal liability in respect of personal injury and property damage, however the key economic exposure of the ‘management risk’ often remains uninsured.
What protection will a Management Liability insurance policy provide?
A Management Liability insurance policy covers the directors, officers, senior managers and the Company in relation to exposures associated with managing a company.
The main areas of cover in a Management Liability insurance policy, include but are not limited to:
Directors & Officers Liability Cover
This covers any Insured Person for any Claim alleging a Wrongful Act by any Insured Person and in respect of which Claim the Insured Person is not indemnified by the Company.
Company Reimbursement Cover
This covers the Company for any Claim alleging a Wrongful Act by any Insured Person and in respect of which Claim the Company is permitted or required by law to indemnify the Insured Person.
Company (Entity) Cover
This covers the Company for any Claim against the Company alleging Wrongful Acts.
Employment Practices Liability Cover
This covers the Insured Persons and/or the Company for any Claim against the Insured Persons and/or the Company alleging any Employment Practices Breach.
Superannuation Trustees Liability Cover
This covers the Trustees of a staff superannuation fund for any Claim against the Trustees alleging any Trustee Responsibility Breach.
This covers the Company for, among other things, any direct financial loss sustained by the Company as a result of the theft of Money, Securities and other tangible property by any of its Employees.