Management Liability Insurance can be relevant where directors, officers, managers or the organisation itself can face claims arising from how the organisation is managed.

It is commonly considered by private companies and other organisations that:

• Employ staff
• Have multiple directors or shareholders
• Have regulatory obligations
• Make significant financial or operational decisions
• Have external investors or stakeholders
• Manage employment issues
• Have exposure to regulatory investigations

What types of claims can arise? #

Depending on the policy and sections selected, Management Liability can address exposures involving:

• Directors and Officers Liability
• Company or Entity Liability
• Employment Practices Liability
• Statutory Liability
• Crime or Employee Dishonesty
• Tax Audit costs

Not every policy includes every section, and limits, excesses and exclusions vary.

Is Management Liability Insurance compulsory? #

Management Liability Insurance is generally not compulsory for every Australian business.

A requirement can still arise through matters such as:

• A commercial contract
• Finance or investment arrangements
• Organisational rules or governance requirements
• A director indemnity arrangement

Holding insurance does not remove a director’s or organisation’s legal duties, and not every liability can be insured.

Webber Insurance can provide a high-level insurance review of contract requirements and can refer clients for a legal contract review, including the insurance and indemnity provisions. We do not provide legal advice.

Why can it be relevant to private companies and SMEs? #

Private companies and SMEs can face claims or investigations involving employees, regulators, shareholders, customers, competitors and other parties. Smaller organisations can also have fewer internal legal, human resources and compliance resources available when a matter arises.

Depending on the circumstances and policy, relevant matters can include unfair dismissal, discrimination, bullying, directors’ duties, workplace health and safety issues, fraud, tax audits, regulatory investigations and shareholder disputes.

The relevance and scope of cover can depend on the business structure, employees, turnover, industry, regulatory exposure, claims history and contractual requirements.

Contact our team if you would like help reviewing whether Management Liability Insurance should form part of your insurance program.