Management Liability Insurance
Offers financial protection for you, your fellow directors, employees, and your company against wrongful acts committed, or alleged to have been committed, by you or your employees.
- Directors’ and Officers’ liability
- Corporate legal liability (entity)
- Employment practices liability
Management liability insurance is a suite of complementary covers designed to offer financial protection for you, your fellow directors and employees, and your company for wrongful acts you, or your employees, have, or are alleged to have, committed.
The Alan Boswell Group Difference
We’re specialists in D&O, corporate and employment practices liability and have a unique scheme in place with AXA to provide comprehensive management liability cover.
As an insurance broker we have access to a wide range of products, so we can provide you with the best solution for your business. Add to this service our outstanding in-house claims team and risk management solutions and you have your ideal insurance partner.
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Management liability insurance in detail
Management liability policies include three products, Directors’ & Officers’, entity (also known as Corporate Legal Liability) and employment practice liability. These combined products help to provide cover against judgements and settlements, defence costs, and claimants' legal costs.
Directors' & Officers' section generally includes:
Cover for past, present, and future
24/7 legal advice and claims line
Indemnity insurance
Guidance
Entity section generally includes:
Indemnity insurance
Contractual liability
Employment practices liability generally includes:
Indemnity insurance
Representation costs
What is management liability insurance?
What does management liability insurance cover?
To understand what management liability covers it is easier to look at the three different heads of cover in isolation.
Directors’ and Officers’ insurance
The idea of D&O insurance is to provide financial protection for directors and officers of a company as they undertake their job. It is a difficult and complex job and they are making decisions daily, that are subject to scrutiny. These decisions can leave a director exposed to personal, civil, or criminal liability and it is very important to remember that a director’s liability is unlimited; their own personal assets are at risk: their car, their house, and even cash in the bank.
It is a common misconception that directors assume the company will provide indemnity – but this only happens in very limited cases and only in certain situations.
Directors’ and Officers’ insurance covers the cost of compensation claims made against directors and key managers for alleged wrongful acts.
Wrongful acts may include:
Breach of trust
Breach of duty
Negligence
Error
Misleading statements
Wrongful trading
Defamation, slander, or libel
Claims can be made by many different organisations or individuals.
Just looking at legislation, a company director has responsibility for ensuring the company complies with the:
Health & Safety Act
Companies Act
Insolvency Act
Companies Security Act
Company Directors Disqualification Act
Insurance Act
etc.
It’s a long list. But it’s not just legislation, there are other things. Company directors can face allegations of libel and slander, they get involved in the complexities of takeovers, mergers, acquisitions, and regulatory compliance. Even trading with customers can see claims made.
It is really important to remember that directors can also be held accountable for the actions of others. So while a director might not have committed a particular wrongdoing, the actions of a subordinate can have ramifications for a director.
Sometimes claims may be spurious and frivolous. But in actual fact, the cost to defend those claims and make them go away can be very significant.
A management liability policy would cover the costs of defending these legal claims and any subsequent settlements or awards.
Corporate legal liability (entity insurance)
Corporate legal liability is similar to Directors’ and Officers’ insurance but defends claims made against the company, as opposed to individuals.
Often, when making claims against a company director, a lawyer will also name the company involved if they can. This will be because the company will be seen as having greater assets than the individual. It makes sense, therefore, to provide your company with the same protection. This is where corporate legal liability insurance comes in.
Examples of potential claims can include:
Breach of contract
Copyright infringement
Corporate manslaughter
In the same way a D&O policy covers the costs of defending these actions for the individual, a corporate legal liability policy covers the company’s costs of defending these claims through the legal process and any awards or settlements.
Corporate legal liability can only be purchased in conjunction with D&O insurance.
Employment practices liability insurance
Employment practices liability insurance (EPL) offers the company and their directors, officers, and employees protection from claims arising from a wide range of employment disputes.
Employment law has changed dramatically over the years and, rightly, offers employees protection from mistreatment and poor working practices. Employees know their rights and will hold their employer accountable if they feel there has been a breach in their conditions of employment.
Disgruntled employees can also cause major disruption through spurious claims against a company or another company employee. They all need to be investigated and addressed, often resulting in costly legal action.
Some common employment disputes include:
Unfair or constructive dismissal
Change of duties without agreement or consultation
Discrimination – this could be on the grounds of pregnancy, disability, sex, race, religion or belief, gender reassignment, sexual orientation, age, and marriage and civil partnership
Harassment
Breach of employment contract
Stress caused at work
Unfair redundancy
Having an employment practices liability policy in place will provide you with the means to defend these claims through any legal process and the cost of any awards or settlements.
An EPL policy can be purchased standalone, but more often than not it is combined with D&O and entity insurance within a comprehensive management liability policy.
FAQs
Related products
Management liability insurance is a comprehensive policy made up of three different protections designed to cover the legal costs (and any settlements or awards) of defending against claims of wrongful acts, or alleged wrongful acts, made against company directors, employees, or the company itself.
It offers financial security for both businesses and individuals, typically paying out for the costs of a wide variety of claims.
The three heads of cover that can make up a management liability policy are:
Directors’ and Officers’ Insurance
Directors’ and Officers’ Insurance (D&O) covers the cost of compensation claims made against your business’ directors and key managers (officers) for alleged wrongful acts.
Corporate Legal Liability Insurance (CLL)
CLL offers protection to the company and provides the funds to defend claims made against your company for a wide range of alleged wrongdoings and any associated settlements or awards.
Employment Practices Liability Insurance
Cover designed to support businesses in defending litigation claims made by current and ex-employees for alleged breaches of employment law.
Get in touch
Whether you need a quote, have a general enquiry, want to register a claim, or talk it through over the phone, we're here to help.
