05 Dec An Overview of Management Liability

Posted at 23:19h in News by

An Overview of Management Liability

Did you know that New South Wales is the third most litigious state in the world behind California and Texas? In this increasingly litigious environment, businesses have a higher exposure to legal, statutory and employee claims which can have an immense financial strain.

What is Management Liability Insurance?

A Management Liability insurance policy protects a business and individuals from the financial exposures related to running a company such as legal defence costs, or the payment of Fines or Penalties ordered to pay by an Act of Parliament.

What does Management Liability generally cover?

Directors’ and Officers’ liability, protects the directors and officers personally from financial and reputation loss arising from claims that allege a breach of duty in the running of the business.

Statutory liability, cover for Fines or Penalties against the entity which is civil, strict or administrative which the entity is ordered to pay pursuant to any Act of Parliament.

Employment Practices Liability, protects the entity, officers and employees against claims made by past present and prospective employees.

Fidelity, protection for loss of money or property resulting from an act of employee dishonesty such as fraud and theft.

Who needs Management Liability?

Businesses that cannot afford to fund the significant legal defence costs arising from the potential situations above. Policyholders will be able to access legal professionals in these instances providing peace of mind in the event of a claim such as the below real life case studies.

Directors & Officers – WH&S Claim Example

An employee of an excavation company was fatally injured after accidentally digging into electrical cabling. WorkCover investigated the circumstances surrounding the fatality and the Office of Public Prosecution (OPP) served a Charge Sheet and Summons on the excavation company, alleging the company had breached various sections of the Work Health & Safety Act.

The organisation vigorously defend the action for three years and the OPP subsequently discontinued the matter, however Defence Costs of $343,000 were incurred.

Statutory Liability Claim Example

Food audit conducted on the Insured premises and it was found the Insured was non compliant with numerous sections of the Food Safety Act.

Penalty: $80,000, plus costs of $1,577

How much does Management Liability insurance cost?

Management Liability is relatively affordable, however costs will always depend on your circumstances. CRM Brokers can provide you with an indicative quotation; click here to access our form. This should only take 2-3 minutes to complete and a CRM Broker will be able to provide you with an indication on price and may then answer further questions, if you have any.

If you have any further questions regarding Management Liability and how it can protect your business, contact CRM Brokers on 1300 880 494.

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