Management Liability is a tailored insurance offering that provides cover to Senior Management and the Company for the decisions and responsibilities involved in running a business.
Managing a private company has its risks. Even with a skilled and experienced management team, some companies encounter unanticipated threats or risks that, due to their complexity or nature, are better off mitigated through insurance protection.
In business, no relationship is free of risk, including dealings with:
- Employees
- Customers
- Investors
- Suppliers
- Vendors
- Competitors
- Government Agencies (e.g. ASIC, ACCC etc)
- Creditors
Many business owners would not consider these as sources of potentially harmful litigation, yet even the threat of legal action can have a negative impact on a company’s bottom line through expensive legal fees.
Think about these situations –
- A discrimination action or failure to promote allegation from an employee
- An investigation into alleged anti-competitive practices within a specific industry
- OH&S Investigation
- A breach of contract action from a customer
- An embezzlement scheme carried out by an employee over a number of years
- Legal proceedings by a disgruntled investor
- Acting as company secretary or outside director on other boards
- There are over 663 state and territory laws that impose personal liability for a company’s breach of the law
These exposures can easily cost a private company thousands, even millions of dollars. They can be surprisingly frequent and more complex than you might expect.
Ultimately, the allegations made may be spurious, however, without adequate cover, you leave yourself open to expensive litigation and defence.
Management Liability policies are modular polices providing the following coverage sections:
- Directors and Officers – Covers the Directors and Officers for any claims alleging Wrongful Acts such as negligence, breaches of duty and misrepresentation
- Company – Covers the Company where there is a claim against the entity for alleged wrongful acts
- Employments Practices Liability (EPL) – Covers the Company for claims alleging an employment breach such as wrongful dismissal, discrimination and harassment
- Crime – Covers the company for direct financial loss (crime) caused by employees and/or a Third party
- Tax Audit – Covers the Company for costs of engaging your accountant to comply with a Tax Audit by the ATO
- Statutory Liability – Covers the Insured for fines, penalties and defence costs of legislation breaches
- Occupational Health & Safety Defence Costs – covers the Insured for legal representation of defending an investigation and/or prosecution by WorkSafe
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