Management Liability Insurance
Management liability insurance covers the costs against defending directors, managers and employees against any claims that are the result of their actions or decisions.
What is management liability insurance?
When you operate a business, you may be personally liable for any actual or alleged breaches of the Corporations Act. It’s just not large companies that are exposed, small and medium business owners and officers can be at risk as well.
Management liability insurance covers the costs against defending directors, managers and employees against any claims that are the result of their actions or decisions.
Who should consider management liability insurance?
Management liability insurance can protect your business and personal assets, such as your home, from being sold to cover the cost of unexpected liability costs.
What can management liability insurance cover?
Management liability insurance vary in the benefits they provide. Your Westphalian insurance broker can help you find the right product tailored to suit your needs. Depending on your policy, management liability insurance may cover you against:
Type of cover | Potential benefits |
Employment practice liability | Covers payouts for claims of employment breaches, such as wrongful dismissal, bullying or discrimination. |
Directors’ and officers’ liability | Protects 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). |
Crime protection | Protects your business against claims such as employee or third party fraud (not all criminal activity is covered). |
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 and Safety) |
Defence costs | Covers your legal costs if your business ends up in court |
What usually isn't covered by management liability insurance?
Exclusions, the excess you need to pay and limits of liability can vary greatly depending on the nature of the product you are purchasing, the associated risk, the insurer and the requirements of your business.
Policies generally do not include cover for:
- Cybercrime, unless specifically set out in your policy (you can get cover extensions in some cases).
- Employee entitlements such as wages or superannuation.
- Intentional acts by an insured.
- Breaches of professional duty in relation to professional services or advice provided.
- Accidental property damage or bodily injury to third parties.
- Known claims and circumstances.
- Claims arising from insolvency, bankruptcy, administration, liquidation or receivership.
There are exclusions which are specific to each type of policy, which your Westphalian insurance broker can outline for you.