What Is Management Liability Insurance?

80% of small and medium sized businesses do not protect themselves and their directors and officers against personal claims against them although the list of potential and actual causes of claims is growing rapidly. These range from corporate manslaughter, health and safety, environmental and other governmental or regulatory actions to claims from employees, creditors, suppliers, shareholders and customers.

Increasingly the management of businesses is being personally bought into the litigation process on the ‘someone must take the blame’ culture. A limited liability company no longer protects management from unlimited liability.

Rather than just insure the directors’ & officers’ risk, a more modern approach is to arrange a Management Liability Portfolio Insurance which brings together the three main risks faced. These are:

  • Directors and Officers Liability Covers
  • Employment Practices Liability Covers
  • Corporate Legal Covers

Management liability insurance covers the legal costs of defending the business and its management against a whole range of actions from corporate manslaughter, pollution and environmental problems, to employee and regulatory authorities’ actions. It also pays the costs or financial losses from a number of events such as employee dishonesty, lack of data protection, employee claims, those from other shareholders and many more.

With solicitors widening the net of potential defendants on ‘catch all’ basis, it makes sense to have one insurer and policy covering everyone’s interests. This approach protects the management and the business against a wide range of expenses and damages which could potentially cripple them financially.

Your business is far more likely to be taken to an employment tribunal than have a fire at its premises. Management liability insurance policies shore up gaps in cover left by limited liability status (not applicable to directors’ personal assets) or legal expenses cover (invalid where a successful defence is unlikely).

For further information or a quotation, please contact Tony Gibbs on 0118 9165485 or complete one of or enquiry forms.

*Information correct as of 1st May 2016

Author: Tony Gibbs | February 3rd, 2011

Contact the author

Tony Gibbs
Get in touch:   Reading: 0118 916 5480   London: 020 7036 8767   info@macbeths.co.uk