Business Insurance
Management Liability Insurance
Decisions about staff, finances and governance can expose a business and its decision-makers to allegations of wrongdoing. Management liability brings together selected covers for these risks, but the sections and the people insured differ between policies.
What it can cover
A policy may combine several separately defined sections, such as:
- Directors and officers liability, and reimbursement to a company that indemnifies them.
- Employment practices liability for covered allegations such as discrimination or wrongful dismissal.
- Certain investigation costs, statutory liability or employee crime losses, where the relevant section is purchased.
Common risks and exposures
An employment dispute, a regulatory investigation or allegations about a director’s decisions can require a response before liability is established. Growth, acquisitions, restructuring and financial pressure can change these exposures between renewals.
Who may need this insurance
Private companies and their directors, officers and managers may benefit from reviewing these risks. Ownership structure, employee numbers and financial position are relevant; not-for-profit organisations and larger entities may require different policy forms.
What KIB Group considers
- Who needs to be insured, including subsidiaries, past directors and newly acquired entities.
- Financial information, employment practices, governance controls and previous disputes or investigations.
- Separate and shared limits, defence cost treatment, deductibles, notification requirements and changes in control.
Exclusions and considerations
Fraud, dishonesty and deliberate misconduct exclusions need careful reading, including when they apply to different insured people. Insolvency, known matters and professional services may also be restricted. Fines and penalties are not automatically covered: some cannot lawfully be insured, regardless of the policy language.
Questions worth asking
Is management liability the same as professional indemnity?
No. Management liability focuses on selected management and governance exposures. Professional indemnity addresses covered claims arising from advice or professional services to clients. One does not automatically replace the other.
Does every employment dispute fall within the policy?
No. Employment practices cover has its own definitions, exclusions and limits. Contractual entitlements, wages and some other payments may not be insured, even where related defence costs are covered. A complaint should be reviewed against the actual wording.
Related insurance
Cover starts with a conversation.
Talk with our Melbourne-based team about your business, wherever you operate in Australia.
This is general information, not personalised financial product advice. Cover varies and is subject to policy terms, conditions, limits and exclusions. Consider the relevant policy wording and your circumstances before deciding; an enquiry does not bind cover.
