What is management liability insurance?
When you’re running a business, you may be personally liable for any actual or alleged breaches of the Corporations Act. And it’s not just large companies that are exposed – small and medium business owners and officers could be at risk as well.
Management liability insurance covers the costs of defending directors, managers and employees against any claims that are the result of their actions or decisions.
What can it cover?
Management liability insurance policies vary in the benefits they provide.
To give you an idea, here’s the type of cover that your policy may include:
|Type of Cover||Potential benefits|
|Employment practice liability||Covers payouts for claims of employment breaches, such as wrongful dismissal, bullying or discrimination.|
|Directors’ and officers’ liability||Protects your proprietary limited company’s past, present and future directors, officers and managers against claims of wrongful acts, such as misrepresentation or breach of duty (subject to business size).|
|Crime||Protects your business against claims such as employee or third party fraud (not all criminal activity is covered).|
|Corporate Liability||Covers costs that your business would incur if you need to defend and settle claims from outside parties alleging wrongful conduct, as well as investigation into the affairs of the company.|
|Statutory liability||Covers the cost of defence, fines and penalties under some statutes (e.g. Work Health and Safety).|
|Defence costs||Covers your legal costs if your business ends up in court.|