Management Liability Insurance
An expert guide about management liability insurance
It's important to understand that when acting as a director of a business, you can be held personally liable for the decisions you make. Below we explain how a management liability policy can offer coverage for legal costs, damages, fines and penalties.
Executive coverage and management liability insurance explained
As a specialist management liability insurance broker, we work with the leading insurers to provide cost-effective coverage designed to meet your company and director's needs. Policies will typically include directors and officers, and corporate legal liability, with options to include employment practices liability, and other additional covers.
What is management liability insurance?
Management liability insurance is a package policy which combines directors and officers insurance and corporate legal liability. Additional coverage for employment practices liability, employee theft, and kidnap and ransom can also be included.
Operating a business is increasingly complex and you can be personally liable for the actions you take on behalf of the company. The coverage offers peace of mind you can defend yourself against civil, regulatory, or criminal allegations.
The policies are designed for small and medium sized private companies and offers financial protection to the senior management and decision makers from a range of disputes, litigation, and regulatory investigations.
What management liability insurance covers?
A management liability policy is arranged to help businesses of all sizes, big and small, to protect against potentially large liability claims. Civil, regulatory and criminal allegations made against individuals and/or the company can be very costly and time consuming to defend, even if they're without merit. Executive liability insurance offers peace of mind you can defend legal actions made against you.
Breach of duty
Directors can be held personally liable for failure to do something that you are legally responsible, otherwise known as a breach of duty.
Neglect
All directors can be held accountable for actions of another director due to a lack of oversight, even though they had no knowledge.
Breach of trust
A personal liability for directors can occur for breaching a third parties’ trust, when you have failed to act responsibly on behalf of the company.
Looking for management liability insurance? Talk to one of our experts and arrange your cover today
Coverage starts from £381 annually for £1 million D&O and £1 million CLLHow management liability insurance can offer financial protection?
Employee theft
Otherwise known as fidelity insurance, employee theft cover helps by offering the company financial protection for the theft of property, money or securities from employee dishonesty or fraud. Companies with inadequate controls are often the target of sophisticated criminal networks and disgruntled employees. The coverage can offer valuable protection against damaging criminal behaviour.
Kidnap and ransom
Kidnap and ransom insurance can help protect your business against the associated costs with incidents of kidnapping and extortion, potentially offering a crisis management service.
Executive liability insurance for your management team
Legal defence costs and damages
The policy will cover defence costs, legal fees, expenses, and damages, if a customer, competitor, supplier, contractor, administrator, creditor, shareholder, or employee, demands financial compensation from you personally.
Investigation costs and prosecutions
The policy will cover the cost of regulatory investigations and prosecutions into the conduct of an insured person or the company by a governmental, regulatory, law enforcement, professional or statutory body with powers to investigate.
Management liability insurance cost
Management liability insurance starts from £381 per year, or £31.75 per month for £1 million D&O and CLL. However, the cost of your cover will be dependent upon a number of different factors described below.
Turnover, total assets, net worth, profitability, industry sector, US exposure, and claims history are all rating factors that insurers take into considering when calculating your management liability insurance cost.
In a litigious and connected world where third parties can suffer a financial loss, the coverage is an increasingly important to safeguard the personal assets of the management team and non-executive directors.
What does management liability insurance not cover?
There are numerous business insurance covers available that can offer financial protection is a range of different circumstances. Ensure your company is adequately covered from insurable business risks with a selection of comprehensive policies.
Ensure you are personally protected when acting on behalf of the business. Get a management liability insurance quote today.
Talk to one of our expert insurance brokers about your business needsFrequently asked questions
Is management liability insurance necessary?
There is no legal requirement to arrange the coverage. However, a policy can offer peace of mind to a company’s directors, officers, senior managers, whose professional leadership roles expose them to scrutiny from shareholders, regulators, competitors, customers, employees and other parties.
Why management liability insurance is important?
Civil, regulatory, and criminal allegations made against individuals and/or the company can be very costly and time consuming to defend, even if they're without merit. Directors and officers insurance offers peace of mind you can defend legal actions made against you.
As a director how can I be held personally liable?
There are a number of statutes that make directors personally liable for their actions on behalf of companies. The Companies Act 2006 details a number of duties that a director must comply with. If these laws did not exist then directors could pursue profits recklessly without any consequence after putting the business into administration.
Related articles and guides
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Bought in conjunction with a D&O policy, the core purpose of a CLL policy is to provide financial protection for the company against the consequences of actual or alleged "wrongful acts".