Management Liability Insurance protects you and your company against the risks and exposures of running the company (i.e. your liability for mismanagement).
Without adequate protection you could risk losing, not only your business, but also your personal assets. This insurance therefore protects you personally and therefore your wealth and lifestyle. The legal costs to defend allegations of wrongful acts alone can be financially crippling for businesses and individuals.
Management Liability Insurance not only protects Directors & Officers for legal liability they may incur personally in managing a corporation, it also extends to the corporation itself for certain types of claims.
It’s an ideal insurance for small businesses and the most common form of incorporated entity to which Management Liability Insurance is offered is for a proprietary company.
Management Liability Insurance will generally cover the following amounts in relation to the above actions:
- Representation costs where a Director or Officer is legally required to attend an inquiry or investigation relating to the affairs of the corporation
- Legal costs & expenses in the defence and investigation of a Directors & Officers claim
- Any compensation required to be paid by the insured in order to dispose of a Directors & Officers claim
Actions against the corporation or losses sustained by the corporation generally covered by a Management Liability Insurance policy include:
- Directors & Officers liability
- Company reimbursement
- Company liability
- Employment practices liability
- Trustee liability
- Business crisis consultant fees
- Representation costs in respect of an occupational health & safety investigation
Effective risk management includes:
- Directors and officers should be fully briefed on their areas of responsibility, so that all decisions may be taken on an informed basis; and
- Larger companies should establish audit committees to check on the conduct of the business and compliance with all statutory requirements.
Caution is exercised by underwriters with:
- Finance companies and companies involved in property and real estate, since in times of a market downturn they may experience problems with real estate purchased during boom times
- Companies that have experienced very rapid growth in a short period of time and been involved in takeover and merger activities, as in such cases the company and its directors may have been involved in activities which make them more prone to litigation by parties who have been adversely affected
- New companies, because there is no past record for underwriters to look at. In such cases, it is necessary to look to the directors and principal officers of the company and look at their background and experience; and
- Companies that are in a consistent loss—making situation.
Our Brisbane Insurance Brokers can help you get the right insurance cover by assessing your specific needs and recommending the best value insurance solution for your business, whilst still maintaining the highest standard of cover.
Contact us today to get a Management Liability Insurance Quote.
Surround yourself with professionals who make your life easier, when you call through to us – this is our objective.