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Management Liability

No matter what your business, Ausure Macarthur provide expert advice on a variety of products suitable to your needs. 

Protect yourself and your business from claims of mismanagement

Management liability insurance is a cover that is usually overlooked by business owners.

It shouldn’t be.

It’s essential to ensure the protection of your business, directors and management.

Did you know that managers and directors of a business can be sued for mismanagement that causes loss to others? Without adequate protection you could risk losing, not only your business, but also your personal assets. This insurance protects you personally, and therefore your wealth and lifestyle.

Management liability insurance can provide protection against the financial exposures that come with managing a company. It ensures that you can defend, settle or pay compensation claims, without putting your business or personal finances at risk..

Why is Management Liability so overlooked?

Lack of understanding

Many small business owners are unaware of the existence of Management Liability Insurance, alternatively it’s assumed that cover is provided in existing policies held by the company, such as Business Package, Public Liability or Professional Indemnity. As the regulatory environment changes, directors are often unaware of their full responsibilities at law.

“Never happen to me”

Some directors do not foresee the risk to their business of these “intangible” claims that may arise. The old adage of “it will never happen to me” is a common theme. Directors do not realise how much these claims can actually cost and therefore do not see the benefit in paying the premium.

“It’s a small risk”

Business owners believe that management have a handle on the running of the company and the risk of such a claim arising is minimal.

Smaller businesses often think they are too small to be hit with such claims, unfortunately this is not true.

Whatever the reason the policy has been overlooked, it is important that directors and business owners are aware of all risks faced by their company and have an understanding on the insurance policies that can provide adequate protection.

What can Management Liability Insurance cover?

Directors & Officers Liability

Directors & Officers Liability will protect the past, present and future directors and officers of a business. It will also cover anyone else involved in the management of a company, including employees.

 

Director & Officer claims can arise from acts such as:

• Engaging in Unfair Competition

• Fraud or Breach of Fiduciary Duty

• Misappropriation of Trade Secrets

• Insolvent Trading

• Manslaughter

• Intellectual Property Breach

These types of claims can be made against an individual, the company or both.

 

Company Liability

Company Liability can also be known as Entity Liability or Corporate Liability. Company Liability provides cover for actions arising from managerial matters. Many of the claims made against the directors and officers will typically be brought first against the company.

 

Claims Examples:

• Wrongful Act including Fraud

• Shareholder Dispute

• Unfair Treatment of Shareholders

• Environment Prosecution

• Breach of Contract

• Accidental Death

• Identity Fraud

Company Liability can be an optional cover with some insurers. It is however just as important as Directors & Officers Liability and should be included in all Management Liability Insurance policies.

 

Employment Practices Liability

Employment Practices Liability can also be known as EPL cover. Employment Practices Liability is the most commonly claimed under section of a Management Liability Insurance policy. This cover provides protection to the company, directors, officers, and employees for employment breaches. Claims arise from current, past or prospective employees as well as, in some cases, contractors and sub-contractors.

 

Claims traditionally arise from:

• Bullying and/or Harassment

• Unfair or Wrongful Dismissal

• Discrimination

• Employee Duress

• Employee Misconduct

 

Statutory Liability

Statutory Liability can also be known as Stat Liability cover. Statutory Liability can pay fines and penalties awarded against the business for allegations of wrongful breach of certain legislation. Statutory Liability also provides legal costs to defend the matter as well as representation at an investigation or inquiry. Statutory Liability can cover fines or cash penalties arising from unauthorised or irresponsible actions of:

• Directors & Officers

• Partners

• Employees

• Contractors

• Agents

 

Who can bring an action against a company, its directors, officers and employees?

• Regulators (e.g. ACCC, ASIC & the ATO)

• Employees

• Competitors

• Clients

• Liquidators/Administrators

Statutory Liability Insurance does not provide protection arising from policy prosecutions or breaches of taxation legislation.

Do you have any questions about Management Liability insurance? Call us today on 1300 633 530.

We are the experts in business risks, we spend the time (for free) researching your company to make risk recommendations. No obligation.

Give us a call to get a FREE risk Assessment today.

Ph: 1300 633 530