Management Liability Insurance
Management liability insurance relates to the risks of running a company. It can include cover for directors and officers personally, as well as for the company.
It is commonly bought by private companies, not-for-profit organisations and associations. Sections vary widely, so the policy wording is worth reviewing in detail.
Who this insurance may suit
- Directors of private companies
- Not-for-profit boards and committees
- Family businesses with employees
- Companies planning growth, investment or sale
- Businesses managing employee entitlements and superannuation
Why this cover may be important
Directors and officers can be held personally liable in some circumstances. Claims may come from employees, regulators, creditors or shareholders.
Employment disputes, workplace investigations and regulatory inquiries can involve legal costs long before any outcome is known.
Potential areas of cover
Cover varies between insurers and policies. Depending on the policy, cover may include:
Directors and officers liability
Cover may include claims against individual directors and officers for wrongful acts in their management role.
Company liability
Some policies extend to claims made against the company itself, subject to terms and limits.
Employment practices liability
This section may respond to claims such as unfair dismissal, discrimination or harassment allegations from employees.
Statutory liability
Cover may include defence costs and some insurable penalties arising from certain breaches of legislation, where the law allows them to be insured.
Employee theft or crime
Optional crime cover may respond to financial loss from theft or fraud by employees or third parties.
Tax audit costs
Some policies contribute towards professional fees incurred during a tax audit, within a sublimit.
Common risks
- An unfair dismissal or discrimination claim
- A workplace safety investigation
- Claims from creditors or shareholders
- Employee theft or payment fraud
- A regulatory inquiry into the company's conduct
- Costs of a tax audit
What may not be covered
Every policy has exclusions, limits and conditions. Some common considerations include:
- Fines and penalties that cannot legally be insured are excluded.
- Deliberate, fraudulent or dishonest acts are generally not covered.
- Known circumstances before the policy starts are usually excluded.
- Each section may carry its own limit, sublimit and excess.
- Claims involving professional services are often excluded and covered under professional indemnity.
Always read the Product Disclosure Statement and policy wording. Your broker can explain how they apply to you.
Why work with Tasman Insurance Group
- We take time to understand your business or circumstances before discussing cover.
- Where applicable, we approach suitable insurers and compare the options available.
- We explain exclusions, limits and excesses in plain English before you decide.
- We help with changes during the year, renewals and claims.
Management Liability Insurance FAQs
Who is protected by management liability?
Depending on the policy, it can protect past, present and future directors and officers, and sometimes employees and the company itself.
Is management liability the same as directors and officers insurance?
Directors and officers cover is one part of management liability. A management liability package typically adds other sections, such as employment practices, statutory liability and crime.
Do small private companies need it?
Smaller companies still face employment claims, regulatory inquiries and creditor disputes. Whether the cover is worthwhile depends on your structure and risks. A broker can talk through your situation.
Does it cover workplace safety fines?
Many fines and penalties under work health and safety law cannot legally be insured. Some policies may still cover defence costs, subject to the wording.
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Ready to talk about management liability?
Request a quote or call us. We'll ask about your circumstances and discuss the options available.