About management liability insurance?
When you’re running a business, you may be personally liable for any actual or alleged breaches of the Corporations Act. And it’s not just large companies that are exposed – small and medium business owners and officers could be at risk as well.
Management liability insurance covers the costs of defending directors, managers and employees against any claims that are the result of their actions or decisions.
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Who should consider it?
If you are faced with unexpected liability costs, management liability insurance can protect your business and personal assets, such as your home, from being sold to cover the cost of paying claims.
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➤ in fact
“Penalties awarded against companies and its directors or officers for work health safety breaches have increased by 43% to $22.3 million in one year. Penalties now average $62,000 per company.”
Safe Work Australia, Key Work Health Safety Statistics 2014
Case Study
A former employee claims they were wrongfully dismissed from your business because they were unwell at the time their position was terminated. They want to be reinstated to their role and remunerated for their loss of income while they were out of work. After numerous unsuccessful conciliation attempts, the matter is brought before a court and you have to pay damages to your former employee.
A Management Liability policy allows you to recover some or all of these costs so you can continue to run your business without having to sell your business or personal assets. Depending on your policy, you may be able to make a claim for your legal defence costs, as well as the amount paid to your former employee.
Did you know?
X3
Crime
The most common claims
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.
(Chubb 2016 Private Company Risk Survey)
The most common claims are for employment practices like bullying, harassment and wrongful dismissal.
(Chubb 2016 Private Company Risk Survey)
Major claims by amount relate to crime – including employee fraud.
(Chubb 2016 Private Company Risk Survey)
What can it cover?
Management liability insurance policies vary in the benefits they provide. To give you an idea, here’s the type of cover that your policy may include:
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Important note
This information is provided to assist you in understanding some terms, implications and common considerations of Contract Works Insurance, it is not complete, so please request full details from your Steadfast insurance broker. You should consider the Product Disclosure Statement (PDS) in deciding whether to buy (or continue to hold) this insurance and also whether this insurance is appropriate for you. The PDS can be obtained from Sky Financial Group. Deductibles, exclusions and limits apply. Contract Works Insurance is issued by various insurers.
Sky Financial Group is an Authorised Representative of Fay Baker 79619240801 - 336757