Management Liability Insurance

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A Guide to Management Liability Insurance in Australia

Operating a business exposes you to the possibility of being held personally liable for any actual or perceived violations of the Corporations Act. It's not just large corporations that are susceptible to this risk - small and medium business owners and officers may also face liability. To address this issue, Management Liability insurance covers the expenses associated with defending directors, managers, and employees against claims stemming from their actions or decisions.

Who Should Consider Management Liability Insurance?

In the event that unforeseen liability costs arise, Management Liability insurance can safeguard your business and personal assets, including your home, from being liquidated to pay for any claims.

Despite many businesses believing that they won't experience certain risks, statistics indicate otherwise. (Chubb 2016 Private Company Risk Survey)

  • The likelihood of a claim that could be covered by a management liability policy has tripled in the last five years, with 50% of notifications resulting in a claim.

  • The most common claims are for employment practices like bullying, harassment and wrongful dismissal.

  • Major claims by amount relate to crime – including employee fraud.

What Does Management Liability Insurance Cover?

Management Liability insurance policies can differ in the coverage they offer. Here are some examples of coverage that your policy may include:

  • Employment Practice Liability: Provides coverage for payouts related to claims of employment breaches, such as wrongful termination, bullying, or discrimination.

  • Directors' and Officers' Liability: Protects your proprietary limited company's present, past, and future directors, officers, and managers against allegations of wrongful acts, such as breach of duty or misrepresentation (subject to business size).

  • Crime: Offers protection against claims of employee or third-party fraud (not all types of criminal activity are covered).

  • Corporate Liability: Covers the expenses your business would incur if you need to defend and settle claims from external parties alleging wrongful conduct, as well as investigation into the company's affairs.

  • Statutory Liability: Covers the cost of defending against fines and penalties under certain statutes, such as Work Health and Safety.

  • Defence Costs: Covers the legal fees incurred if your business ends up in court.

What Is Typically Excluded From Coverage?

The exclusions and excess payments associated with your policy may differ depending on the insurer you choose. In general, your policy is unlikely to cover:

  • Cybercrime, unless it is explicitly stated in your policy.

  • Employee entitlements.

  • Physical injury or property damage.


Our insurance broker can provide you with additional information on any other exclusions that may apply.

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