What Is Management Liability Insurance?
Management Liability Insurance is a specialised policy designed to protect you and your business against the risks and financial exposures that come with managing a company.
In the dynamic world of business, owners and decision-makers have never faced a more challenging time, particularly in a highly regulated market like Australia. Management liability cover is a shield for your business’s leadership, protecting you from risks that are often overlooked yet can be financially devastating. This can include safeguarding you against claims arising from mistakes, actions or decisions made by the company directors, managers, officers and employees. It can cover the cost of investigating, defending and settling claims by a third party, as well as paying compensation the business is liable for. AIB can provide a policy tailored specifically to your business needs, industry and budget.
Who Should Consider It?
Management Liability Insurance is important for all businesses, from small and medium enterprises to large ASX listed companies. 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. This insurance is essential for:
- Business Owners: Protecting personal and business assets from litigation.
- Directors & Officers: Safeguarding against personal liability for decisions and actions taken while managing the company.
- Managers: Coverage for employment practices liability, including wrongful dismissal, harassment, or other employment-related issues.
- Company: Shielding the business entity itself from legal challenges.
What It Can Cover
While Management Liability Insurance policies vary in the benefits they provide, at AIB we can provide a policy tailored specifically to your needs and your budget.
Cover can include:
Employment Practices Liability
Covers claims from employees alleging discrimination, wrongful termination, harassment, bullying and other employment-related issues.
Directors’ and Officers’ Liability
Directors and Officers Insurance protects individuals from personal losses from claims arising from alleged wrongful acts, such as breach of duty, as a result of serving as a director, officer or manager (past, present or future) of a business.
Crime Coverage
Protects your business against losses due to employee theft, fraud, or other crimes (some exclusions apply).
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 & Safety (fines under Work Health & Safety cannot be covered by insurance in NSW).
N.B. Many people also confuse Management Liability Insurance and Professional Indemnity Insurance. While both are important if you are running a business, it’s important to highlight that they cover very different areas.
Essentially Professional Indemnity covers the activities undertaken in a business and Management Liability Insurance covers the actual running and management of the business.
