Management Liability policies have evolved from Directors & Officers Liability Insurance, which was designed to protect the personal assets of directors and officers by providing indemnity for loss arising from a claim as a result of a wrongful act committed in the course of performing their management duties. The product is now a packaged product similar to a Business Insurance package, however covering the intangible components of your business risk such as claims from shareholders, employees, or statutory bodies. Some of the types of cover included are as follows;
|The Risk:||Management Liability Coverage Section:|
|Investors, customers, clients, government regulators, and competitors can sue a firm’s board members and officers over their actions or decisions.||Directors and Officers Liability Insurance|
|Employees and formers employees can sue a firm, its board members and its officers for discrimination, harassment, and other illegal employment practices.||Employment Practice Liability Insurance|
|A regulatory/Government body may impose a fine upon the company for breach of their statutory requirements.||Statutory Liability|
|A trusted employee can embezzle funds, steal company money, or commit fraud over a long period of time.||Fidelity Insurance|
Other important sections that may be provided include
These policies typically exclude someone who holds more than 15% of the shares from being able to sue another director and obtain cover under the policy. They typically exclude bodily injury and property damage claims. The reason for this is the company already has a general insurance program in place.
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