Since we last wrote about Management Liability insurance, we’ve had many more members obtain this cover, but we often still hear from builders who are unaware of the policy, and the risks to their business and personal assets if left uninsured.

A Management Liability policy protects you and your company against the risks and exposures of running a business.  Without adequate protection, you can lose your business and even your own personal assets.

Management Liability insurance is a packaged product which typically covers the following:

Directors and officers liabilities – provides protection for any claim alleging a wrongful act (i.e. misrepresentation, negligence and breach of duty) by a director or officer

Employment practices liabilities – provides cover for claims alleging an employment breach such as bullying, discrimination, harassment or wrongful dismissal

Statutory liabilities – provides cover for fines and penalties from operating the business including fines related to workers compensation and work health and safety

Crime cover – provides cover for losses arising from dishonest acts such as employee theft and fraud

Internet liability cover – protects the company against traditional publishing related exposures created by the existence of a company website or social media.

The most common types of claims under Management Liability insurance are:

  • Work health and safety prosecutions and inquiries
  • Employee theft, including theft of money and property
  • Unfair/wrongful dismissal, discrimination, harassment, wrongful failure to employ or promote
  • Defamation by directors/officers
  • False, misleading and deceptive conduct by directors/officers and employees
  • Tax audit/investigation costs
  • Breaches of director’s duties and/or fiduciary duties, including breach of trust
  • Actions alleging improper and illegal conduct
  • Statutory breach of duty
  • Statutory fines and penalties
  • Breach of intellectual property rights by directors/officers

 

Importantly, a Management Liability policy provides cover for defence (i.e. legal) costs. Defending against allegations of many common claims can become very costly, and even if the allegation is ultimately unsubstantiated, you may be left out-of-pocket for defence costs without the right cover in place.  In addition to defence costs, the policy provides cover for damages and claimant costs awarded against you, investigation costs, civil fines and pecuniary penalties.

While providing proof of a current management liability policy is not a requirement when signing contracts/tendering for business, not having this cover can significantly affect your business, and also your own personal assets and lifestyle.

If you’d like to know more about Management Liability insurance, please contact the team at MBA Insurance Services on (03) 9411 4555.