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.

The insurance covers the costs of defending directors, managers and employees against any claims that are the result of their actions or decisions.

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.

Who should have 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.

Type of coverPotential benefits
Employment practice liabilityCovers payouts for claims of employment breaches, such as wrongful dismissal,
bullying or discrimination
Directors’ and officers’ liabilityProtects 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).
CrimeProtects your business against claims such as employee or third party fraud (not all criminal activity is covered).
Corporate liabilityCovers 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 liabilityCovers the cost of defence, fines and penalties under some statutes (e.g. Work Health and Safety).
Defence costsCovers your legal costs if your business ends up in court.

What isn’t covered?

Exclusions and the excess you need to pay can vary greatly depending on your insurer.

Generally your policy won’t cover:

  • Cyber crime, unless specifically set out in your policy (you can get cover extensions in some cases)
  • Employee entitlements
  • Property damage or bodily injury

There are other exclusions and conditions that we can outline for you.

Case Study

A former employee claims they were wrongfully dismissed from your business because they were unwell at the time their position was terminated. They want to be reinstated to their role and remunerated for their loss of income while they were out of work. After numerous unsuccessful conciliation attempts, the matter is brought before a court and you have to pay damages to your former employee.

A Management Liability policy allows you to recover some or all of these costs so you can continue to run your business without having to sell your business or personal assets. Depending on your policy, you may be able to make a claim for your legal defence costs, as well as the amount paid to your former employee.

We can provide many more claims examples as you request, to understand the relevance and importance of this Insurance form to your business

Management Liability