Management Liability Insurance - Australian market
Management liability insurance protects management and directors personally and the company entity itself from the many exposures when operating a business.
Directors and management make decisions every day on behalf of their company. With these responsibilities, issues can arise where management may be held personally liable for any actual or alleged wrong-doing.
Increased regulation from both state and federal authorities has heightened the operating risk for businesses of all sizes. Management Liability insurance cover is a way that businesses can help protect themselves from unfortunate incidents and reduce financial loss.
Small business and larger private entities realise the importance of this type of cover. Management Liability has various sections of cover, that protects not only you and your management team but the company itself from a wide range of potential liabilities, including:
- Alleged or Wrongful Acts
- Company Liabilities
- Statutory Liabilities
- Employment Practices Liability
Directors and Management
This provides cover to an Insured Person for claims alleging a wrongful act where the Company entity is not permitted to indemnify the individual.
The allegation of a wrongful act is made against a director, manager or staff member and not the company itself.
A wrongful act can include many things such as Breach of Duty, Breach of Confidentiality, Misstatement or Mismanagement with the level of cover differing between insurers.
Company Liability covers the wrongful acts of the company, not just of directors, officers and employees. It’s a way of covering defence costs and settlements to third parties, and defends against pollution and occupational health and safety proceedings. Coverage can also include tax audit.
Employment Practices Liability
Employment Practices Liability insurance is a common insurance that provides protection for employment exposures.
This coverage is gaining traction in today’s market due to allegations made by employees, or third parties, that involve discrimination or harassment towards that person. Even if the allegations are proven unfounded, they can tie up management time, and also cause considerable angst to the alleged party even if proven innocent.
Covers the direct result of an act or series of related acts of fraud or dishonesty committed by an employee with the intent to cause the company a loss and obtain financial benefit. With agreement from insurers, coverage can be extended for what is termed Social Engineering.
Statutory Liability - Fines and Penalties
Statutory Liability insurance is designed to protect the insured company and its directors, officers or employees from loss incurred because of a wrongful breach of statute.
The cover provided will include any statutory fines or penalties and the defence costs incurred defending a claim which alleges a breach of legislation.
In addition, coverage can also be provided for the costs incurred attending any regulatory investigation. All companies of all shapes, sizes and industry type are expected to comply with a variety of statutes. Unfortunately, a breach of statute could result in the company facing an investigation or prosecution by a regulatory body and subsequently the imposition of a fine or penalty, even if the breach is unintentional.
There are some very handy and additional benefits that can be provided including consultancy costs to manage a crisis, and also, public relations costs to ensure the business maintains it's reputation in the market.
For a no-obligation quotation for Management Liability coverage, please complete our online form, or call us today for a review.