Management Liability Insurance

Understand how management liability can protect you and your business

 What is management liability insurance?

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Management Liability Insurance

What is management liability insurance?

Operating a business is increasingly complex and you can be personally liable for the actions you take on behalf of the company. Management liability insurance provides peace of mind you can defend yourself against civil, regulatory, or criminal allegations. Policies are designed specifically for small and medium sized private companies and offers financial protection to the senior management and company from a range of disputes, litigation, and regulatory investigations.

Management liability insurance is a package policy which combines: directors and officers liability - which offers protection to the individuals that make decisions on behalf of the business. Corporate legal liability insurance - which offers protection to the company in the event they are named in a legal proceeding. Additionally, employment practices liability insurance - which offers cover to the company from claims arising from a range of employment disputes. Additional coverage options may be available depending upon the provider which can include, employee theft, cyber protections and kidnap & ransom insurance.


Directors and officers insurance

Otherwise known as D&O insurance, directors and officers insurance provides cover to the company's senior management and directors against civil liabilities, regulatory proceedings and criminal allegations, whilst acting in a managerial capacity on behalf of a company. It's important to understand that directors of limited companies have a personal liability to claims. The D&O section can cover these individuals defence costs, damages, settlements, awards, and insurable fines.


Corporate legal liability insurance

Otherwise known as CLL insurance or entity cover, corporate legal liability insurance provides the company financial protection from civil litigation and regulatory investigations. Corporate legal liability is similar to D&O insurance but will defend claims made against the company as opposed to individuals. Breach of contract, copyright infringement and corporate manslaughter are typically covered. It's worth noting that CLL insurance section of a management liability insurance policy can only be purchased in conjunction with the D&O insurance section.


Employment practices liability insurance

Otherwise known as EPL insurance, employment practices liability insurance provides the company financial protection from claims arising from a range of employment disputes (i.e. wrongful dismissal, harassment and discrimination). Dealing with employees can be highly emotive and if internal procedures aren't followed, you can leave yourself open to successful employment tribunal claims. The EPL section can protect the company by defending allegations, paying damages and settlements for an alleged wrongdoing.

Why management liability insurance is important?

A policy should be considered by all private companies to provide financial protection to both the directors and the company from legal disputes. Directors and officers insurance is the main cover provided under a management liability insurance policy. The terms can be interchangeable, however you can purchase D&O insurance without corporate legal liability insurance from some providers.


The main features of management liability insurance are:

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, seeks to bring a legal proceeding.

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.

 Why management liability insurance is important?

Examples of management liability insurance claims

It's important to appreciate that directors have a personal liability when undertaking their duties on behalf of the company. 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. The covers, otherwise known as executive risk insurance, offer peace of mind for senior managers and busines owners there are the resources to defend legal actions made against you.

 Breach of fiduciary duty

Breach of fiduciary duty

Directors have a fiduciary duty to stakeholders of the company and if these interests are not protected then directors can find themselves lible.



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

Breach of trust

A personal liability for directors can occur for breaching a third parties’ trust, when you have failed to act responsibly.

Looking for management liability insurance? Talk to one of our experts and obtain your quote today

Protection starts from £381 annually for £1 million D&O and £1 million CLL

What can management liability insurance cover?

Corporate manslaughter

The Corporate Manslaughter and Corporate Homicide Act 2007 means companies can be found guilty of corporate manslaughter as a result of serious management failures and gross breach of a duty of care. The corporate legal liability section can offer the company financial protection from an investigation by the HSE, police and the Crown Prosecution Service, by providing a legal defence and covering insurable fines.

Director disputes

Private company directors are exposed to disputes with shareholders and other directors. The cover can protect individual directors from allegation made on behalf of shareholder or other directors. It's also worth acknowledging that directors can be held accountable for the actions of others, even though they had no knowledge of the wrongdoing.

HSE investigations

Under The Health and Safety Regulations, companies that the HSE consider are in material breach of any health and safety laws are liable for HSE’s related costs, including inspection, investigation and taking enforcement action. Management liability can offer financial protection against regulatory investigations and subsequent insurable fines.


Management liability can cover reasonable professional and legal costs of preparing and defending directors (and shadow directors) against regulatory actions after an insolvency, including any subsequent disqualification proceedings.

Unfounded allegations

A determined litigant can incur thousands in costs and months of time, even when their case has no legal merit. This can occur when claimants feel very strongly about an issue and go ahead with action without following any legal advice. Management liability coverage can provide for reasonable costs of defending allegations made against directors and officers.

Contract disputes

Disagreements with suppliers or customers can mean a claim under the corporate legal liability section of a management liability policy. These types of 'entity' claims are more commonplace than actions against directors for breaches of duty that D&O cover was originally designed for. Some policies will provide sub limited cover for the costs of defending contract disputes with suppliers and customers.

Management liability insurance providers

We work with a wide range of insurance companies to provide cost-effective cover designed to meet your company needs.

Frequently asked questions

Do we need employment practices liability insurance?

Employment disputes can cost significant time and resource. Even with established HR policies and procedures to mitigate exposures, the company and managers can find themselves embroiled in bitter and costly disputes. Employment practices liability insurance provides timely access to a legal defence to protect your business from employment related allegations.

Do we need corporate legal liability insurance?

Corporate legal liability insurance provides protection to the company which is a separate legal entity to the insured persons, such as the directors, officers, or senior management. It can also be a very valuable cover for corporate manslaughter claims and regulatory investigations. 

As a small business do we need management liability insurance?

Every small business should consider coverage to protect the personal liability of the directors that make decisions on behalf of the company. 

What is fiduciary liability insurance?

A fiduciary duty is the obligation a party has to act in another party's best interest. Therefore, fiduciary liability insurance means a policy which offers financial protection to the person which is obliged to act in the best interest of another party. For example, directors owe a fiduciary duty to their shareholders, and pension trustees owe a fiduciary duty to their members.

Can we buy a policy before the business is registered on Companies House?

We will need to check that your business is registered on Companies House before you can buy a policy. However, we are happy to discuss your requirements and next steps before this occurs.

Related articles and guides

What is the Financial Conduct Authority (FCA) and new Consumer Duty?

The Financial Conduct Authority (FCA) regulates the financial services industry in the UK. Its role includes protecting consumers, keeping the industry stable, and promoting healthy competition between financial service providers.

What is Corporate Legal Liability Insurance?

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".

Directors Personal Liability on behalf of Limited Companies

In the United Kingdom, company directors have certain legal responsibilities and potential liabilities associated with their role. It's important for directors to understand these obligations and ensure compliance with the law.

What is the Prudential Regulatory Authority?

In the complex and ever-evolving landscape of financial services, regulatory authorities such as the Prudential Regulation Authority (PRA) in the UK play a pivotal role in ensuring stability, integrity, and consumer protection