Why your Business is Stronger with Management Liability Insurance

What if one of the managers or directors of your company acted illegally or unethically causing losses to individuals or your employees or other businesses? That shouldn’t mean your personal assets are on the line if someone claims or sues, right?

Actually, your home, car and other valuables are vulnerable (and other personal assets may be exposed) if you haven’t protected your business against this risk and others. That’s why we recommend management liability insurance.

Crucial protection for SMEs

Management liability insurance is so vital to a business, that as your broker/advisor, we have a duty of care to keep it on your radar. 

A management liability policy provides protection for the company and its directors & officers against wrongful acts. It’s often confused with directors’ and officers’ insurance for large private or publicly listed companies.

What does it cover?

Here’s a general list of risk exposures a management liability policy could include:

• Mismanagement allegations from stakeholders
• Workplace Health & Safety Incidents
• Employment Issues
• Tax Audits / Investigations
• Employee Theft
• Your actions as a director or officer
• Statutory Liability

There’s a lot there, but the idea is to select just what you need. As your broker/advisor, we can discuss your risks with you to tailor a policy package to suit your needs.

Emerging risks to know

Throughout the pandemic, directors and officers have had (and continue) to respond quickly to imposed restrictions and governmental requirements placed on business operations and management of staff. Businesses have put their contingency plans to the test as they’ve located staff remotely and across alternate sites, and relied heavily on technology to enable continued trading. 

Allegations of management failings may arise out of gaps in management response. These allegations may include poor communication to staff, failure to management health and safety in your workplace, or breaching confidentiality and privacy. 

The rise of litigation

On average, one in five businesses has been involved in a dispute, with 87% of them reporting it led to a financial loss. Payment terms are the biggest bugbear. Meanwhile, SMEs continue to be at risk for unfair dismissals – the Fair Work Commission details the range of costs you could face.

As well, workplace health and workers’ compensation issues cost Australian and New Zealand businesses overall $18.9 million in court fines last year, says Safe Work Australia. It also found Australian employers were out of pocket $6.3 billion annually due to reduced productivity from workers suffering from depression. 

Management liability hands your business much peace of mind. As your broker/advisor, we can demystify and help tailor coverage to protect your business from a range of risks.