Management liability insurance

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.

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.

Management liability insurance provides cover for risks faced by directors, officers and other company managers. It typically helps with claims about wrongful acts, like alleged breach of fiduciary duty, negligence, or errors and omissions in managerial duties.

The page notes that it can help with claims linked to wrongful acts and can also help with employment practices claims, such as discrimination or harassment. What applies depends on the policy wording.

Marsh describes this as a packaged policy designed for small-to-medium enterprises (SMEs), and says it’s designed for SMEs with a turnover of under $150 million.

The D&O section covers the costs incurred in defending directors and managers against allegations of wrongful acts. It can also help protect their personal wealth and assets.

It helps protect your business from allegations of wrongful employment practices, such as wrongful dismissal, discrimination, or harassment by present, past, or prospective employees.

Crime cover is designed to help protect your business against loss of property or revenue due to dishonest activities by employees or third parties, such as fraud and theft.

Statutory liability helps protect your business, and the people who run it, against fines and financial penalties for unintentionally breaching laws or industry rules and regulations.

Yes. The page says it provides coverage for defence costs incurred from formal investigations by regulatory, government, or professional bodies.

Also called corporate legal liability, it helps protect the business entity from claims of wrongdoing. It also covers PR costs to restore or prevent damage to your business’s reputation in a crisis.

The page lists typical exclusions, including fraud or dishonesty, pending or prior claims and litigation, intentional and deliberate acts, bodily injury and property damage, and asbestos-related liabilities. Exclusions can vary by insurer and policy.

Marsh says D&O is the only mandatory component. Other covers, including corporate legal, employment practices, crime, and statutory liability, are optional, so you can tailor the package.

Marsh says cost depends on factors like business size, revenue, and risk exposures. When requesting a quote, you may need to provide a completed proposal form and your latest audited or reviewed financial report.