Management exposures

Protection for the decisions and responsibilities of running a business.

Directors and senior management can face personal and corporate exposures when decisions are challenged by employees, shareholders, regulators, competitors or other parties. Management liability packages can combine several related covers under one policy, although the exact structure varies between insurers.

Cover can include

• Directors and officers liability
• Company liability
• Employment practices liability
• Statutory liability, where insurable by law
• Crime or fidelity cover where included
• Investigation and defence costs, subject to the policy terms

Directors and officers liability

This section may respond to claims alleging wrongful acts by directors or officers in the performance of their management duties. Cover can be important where an individual is personally named in a claim or investigation.

Company liability

Some management liability policies also provide cover for the insured company itself for specified claims. The breadth of this section can vary significantly between insurers and should be reviewed carefully.

Employment practices liability

Employment-related allegations can include unfair dismissal, discrimination, harassment, bullying and other workplace claims, subject to policy terms and applicable exclusions.

Statutory liability

Some policies offer cover for specified investigation and defence costs. Fines and penalties cover is subject to policy terms and applicable restrictions and should not be assumed. Questions about legal duties or whether a penalty is insurable belong with your legal adviser.

Important policy differences

Management liability policies can differ materially in their definitions, insured persons, entity cover, exclusions, sublimits, deductibles, investigation cover, continuity provisions and treatment of prior or known matters. Claims-made provisions and notification requirements are also important.

What you need to consider

• Company structure and ownership
• Turnover, employee numbers and payroll
• Past claims and known circumstances
• Employment practices and workplace exposures
• Regulatory and statutory exposures
• Existing limits, sublimits and deductibles
• Continuity dates and prior-insurance history
• Contractual and corporate governance exposures