Management Liability Insurance
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.
Who should consider it?
If you are faced with unexpected liability costs, management liability insurance can protect your business and personal assets, such as your home, from being sold to cover the cost of paying claims
“The likelihood of a claim that could be covered by a Management Liability policy has tripled in the last five years. With 50% of notifications resulting in a claim”
Chubb 2016 Private Company Risk Survey
Did you know?
Many businesses think it won’t happen to them, but statistics show otherwise. In fact:
X3
The likelihood of a claim that could be covered by a management liability policy has tripled in the last five years, with 50% of notifications resulting in a claim.
(Chubb 2016 Private Company Risk Survey)
The most common claims are for employment practices like bullying, harassment and wrongful dismissal.
(Chubb 2016 Private Company Risk Survey)
Major claims by amount relate to crime – including employee fraud.
(Chubb 2016 Private Company Risk Survey)
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 (fines under Work Health and Safety cannot be covered by insurance in NSW). |
| Defence costs | Covers your legal costs if your business ends up in court. |