Management Liability

Staying on top of all of the facets of your company is a tough job. In an age where you can be sure someone is scrutinising every business decision, you need management liability cover to protect yourself and your company.

What is Management Liability Insurance?

A management liability insurance policy will protect high-level employees, as well as the company, from exposures related to management activities and governance of a company. For example, you and other managers can be personally responsible if someone names your business in a lawsuit.

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Who Should Consider Management Liability Insurance Coverage?

Management liability insurance is a smart choice for all businesses, especially for those that have grown large enough to require several tiers of management and supervision.

Larger companies may require different types of management liability insurance cover, and the same is true for firms that experience expansion. Make sure your cover is on par with your needs by contacting an insurance professional from Grace Insurance.

Why Should I Buy Management Liability Insurance?

Management liability cover is as essential to your company’s security and well-being as your other kinds of business insurance.

Just as a typical business insurance policy can protect your business from fire, flood, and bodily injuries, a management liability policy protects you and company officials from unforeseen actions and reactions of others within your business.

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My Directors and I Follow the Rules and Regulations. Do I Still Need Management Liability Cover?

In a word, yes. Not all miscues in the business world are premeditated; many are simple oversights or honest mistakes. Additionally, federal and state regulations governing workplaces can change at a moment’s notice. Government agencies do not accept ignorance of laws as reasonable excuses, so protecting yourself is critical.

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How Can a Management Liability Policy Protect My Company?

Numerous entities can bring suits against you and your business for a number of reasons. This includes the actions or inaction of:

  • You
  • Your directors
  • Company representatives
  • Managers
  • Employees

This means a management liability policy can provide cover from claims of mismanagement, negligent or dishonest actions, unfair labour practice, and theft brought against you by:

  • Shareholders
  • Government agencies
  • Employees
  • Former employees
  • Managers
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What Kinds of Management Liability Cover Can I Get?

There are a few different specific kinds of cover you can purchase for your small to medium-sized business. These include:

The directors and officers liability cover is the primary policy under the umbrella of management liability insurance. Your policy will offer cover for acts of company mismanagement resulting in legal action directed against senior members of management.
If someone alleges your company is a part of harassment, discrimination, or wrongful dismissal an employment practice liability policy will offer cover.
If your business must pay a director or company officer because of a mismanagement claim, a corporate liability policy will pay.
If your business is the target of internal or external theft, a crime protection policy will cover you.
This policy refers to cover if your company is fined or penalised for violations of workplace regulations. For example, breaches of health and safety rules or privacy laws.
This policy will cover company losses that are a result of the kidnapping and holding a corporate employee ransom under threat of bodily harm.
Australian Management Liability Insurance

A Closer Look: Unfair Dismissal

At one time, terminating someone’s employment was an in-house issue getting little, if any notice from outsiders. However, years of poor treatment, discrimination, nepotism, and the like led to strong protection for workers in the event of their dismissal.

While you may strive to be fair-minded and above board with any termination of workers, you can find your company, your directors, and yourself at the centre of a firestorm when you least expect it.

Unfair dismissal is one of the most common complaints against employers, and it continues to grow.

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Unfair Dismissal by the Numbers

According to the Fair Work Commission’s Annual Report (2018-2019), employers saw a significant number of unfair dismissal suits.

• 13,422- The number of unfair dismissal applications finalised
• The number of applications filed- 13,928
• 8161 of the cases went to conciliation for resolution
• 2560 cases found resolution before conciliation
• 1927 cases resolved after conciliation but before a formal hearing

As you can see, there is no shortage of unfair dismissal charges. If you did nothing wrong, you must address the situation and devote time and money to the resolution. Because of the numbers and the unpredictability of a suit, management liability insurance is a smart option for businesses of all sizes.

You owe it to yourself to protect your business and your good name. Consider speaking with an insurance expert to learn more about management liability insurance. What you do not know can hurt you.

*Please Note* The material compiled here is for informational use only. It does not constitute insurance advice, nor is it intended to take the place of a consultation with an insurance professional.

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