Management Liability
Management Liability insurance provides protection to both the business and the Directors and Officers of the company. Cover is divided in to three key sections:
- Directors & Officers
- Entity Defence
- Employment Law Protection
Directors or any person in a position of authority in a company, such as manager, can be held personally liable for their actions, either in a civil or criminal court. A Management Liability policy will provide cover for legal costs and expenses and also any awards made against you (excluding those of a criminal nature).
Protection is provided in the following areas
- Wrongful acts of Directors and Officers
- Legal defence costs and awards (non-criminal)
- Tax investigations
- Employment disputes and tribunal costs
- Criminal defence prosecution
- Data protection defence
Even if the Director is also a shareholder, there is no limit to the amount they can personally be sued for; therefore there is potential exposure to catastrophic financial loss when acting in the capacity as a Director.
Due to the nature of the cover provided, claims covered under Directors’ & Officers’ Insurance can be extremely varied in their source and nature and not necessarily predictable therefore to an extent you are insuring against the unforeseeable. There is no typical claim under this type of policy however they can arise from sources such as:
- Customers
- Members of the public
- Commercial partners
- Shareholders
- Staff (former or current)
- Members of the public
- Regulatory bodies
Whilst this insurance offers extremely important cover it can also be relatively inexpensive and should be a consideration for all businesses.
