Management liability insurance can allow your most senior managers to confidently back the decisions they make for your business. Whether they’ve provided the incorrect advice, made an error or omission, or committed a breach of duty or wrongful act, this type of liability cover is essential to consider to protect your business, but also the individual executives themselves and, importantly, your clients.
What is management liability insurance?
Management liability insurance provides cover for a range of risks faced by directors, officers and other company managers. It typically provides protection for claims related to wrongful acts, such as allegations of breach of fiduciary duty, negligence, or other errors or omissions in the performance of managerial duties. Management liability coverage can also help protect you from claims related to employment practices, such as discrimination or harassment.
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Frequently asked questions
No. Public liability helps protect a business from the costs incurred from third-party injury and property damage claims.
Even if you’re not at fault, the legal costs to defend yourself or your business can be significant – and even put your personal assets at stake if you’re not insured.
Public liability insurance is compulsory for certain types of businesses.
No, while there may be some overlap between the two types of insurance, they are generally distinct and cover different types of risks.
Management liability insurance and professional indemnity insurance are not the same thing. While both types of insurance are designed to help protect businesses from financial loss resulting from lawsuits, they cover different types of risks.
Management liability coverage also typically provides protection for acts committed by a company's directors, officers, and other key personnel. Whereas, professional indemnity insurance, is designed to protect businesses from claims related to errors and omissions in the services they provide – which can be provided by any business employee.
Management liability insurance provides cover for private companies, while association liability is designed for not-for-profit and charitable associations.
An association liability policy may also include professional indemnity, but a management liability policy does not.
Management liability comes with a ‘condensed’ version of the directors and officers liability (D&O) policy that is designed for SMEs. A management liability policy also includes other covers, including corporate legal liability and employment practices liability, making it simpler and more cost-effective to protect your business from various risks.
The standalone liability insurance for directors and officers is designed for larger organisations and has much broader cover. But it does not come with any other insurance covers – only D&O.
No, while there may be some overlap between the two types of insurance, they are generally distinct and cover different types of risks.
Management liability insurance and errors and omissions (E&O) insurance are not the same thing. While both types of insurance are designed to protect businesses from financial loss resulting from lawsuits, they cover different types of risks.
Management liability coverage also typically provides protection for acts committed by a company's directors, officers, and other key personnel. Whereas, E&O insurance, is designed to protect businesses from claims related to errors and omissions in the services they provide – which can be provided by any business employee.
The cost of your management liability insurance will depend on several factors, including your business size, revenue and risk exposures.
When requesting a quote, be sure to fill in the form values as accurately as possible. This helps us arrange the right premium and cover for your business. Along with the completed proposal form, a copy of your latest audited/reviewed financial report will be required.
For a clearer picture, you can also request a call back to speak to a Marsh advisor.
Inclusions and coverage limits may vary between different insurers and policies.
Typical exclusions may include:
Fraud or dishonesty
Pending or prior claims and litigation
Intentional and deliberate acts
Bodily injury and property damage
Asbestos-related liabilities.
To find out more about the exclusions, deductibles, excesses and limits that may apply to your specific policy, please speak to your Marsh advisor.
Management liability insurance is designed for SMEs with a turnover of under $150 million.
If your business falls under that category, it qualifies for management liability.
The only mandatory component in the management liability insurance is the D&O policy.
All the other policies – corporate legal, employment practices, crime, and statutory liability – are optional, so you can tailor your management liability package to your needs.
Even when your business has ceased trading or is being acquired, it continues to be liable for up to six years (in line with the statute of limitations).
A run-off period refers to a policy provision that protects the insured for a certain period of time, even after they’ve closed the business.
LCPA 23/476
This is a general overview of the policy. Please call us and ask for a copy of the insurer’s policy wording. We recommend you read the policy wording so you have an understanding of the policy terms, conditions and exclusions before you decide whether this policy suits your needs.
Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238369) (“Marsh”) arranges the general insurance (i.e. not the Discretionary Trust Arrangement) and is not the insurer. This page contains general information and does not take into account your individual objectives, financial situation or needs. For full details of the terms, conditions and limitations of the covers, refer to the specific policy wordings and/or Product Disclosure Statements available from Marsh on request. Marsh makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or re-insurers. Marsh makes no assurances regarding the availability, cost, or terms of insurance coverage. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). Any advice or dealing in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) (“JLT”). JGS and JLT are businesses of Marsh McLennan. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.