Management Liability Insurance
Most businesses understand the need to protect their property, liability, transport and credit risks. Fewer appreciate how important it is to protect their management teams.
But with increasing scrutiny from employees, customers, competitors, investors, regulators and the media, this is an area of risk that businesses (and their insurance brokers) should actively address.
MGB arranges Management Liability policies for brokers throughout the UK and overseas, so we’re well placed to help you protect your clients’ interests.
Who needs Management Liability cover?
Any business that makes decisions that affect other parties or employs staff. Management Liability cover safeguards both the entity’s commercial health and protects the individual wealth of directors – whose personal liabilities are unlimited in some instances.
At MGB we arrange Management Liability for a wide variety of companies based both in the UK and overseas.
What can go wrong?
- Directors and Officers face increasing scrutiny from regulators and government bodies for their conduct in their capacity as directors and officers
- They and their kin can be held personally liable for their wrongful actions, even after retirement
- Regulatory and legal frameworks are exerting increasing pressure on management
- Whether or not a company or its directors have done anything wrong, the defence costs and time involved in dealing with claims can be crippling
- If you don’t discuss it with your client, someone else will.
If you’re using an online portal, make sure you know what’s covered and what isn’t and that any risks specific to your client are catered for. For example, do you need (and have) cover for: Extradition Proceedings, Spousal Liability, Outside Directorship Liability or Cyber Liability? Are there any specific exclusions in the cover such as: major shareholders, single signatures, prior and pending litigation. Often the ease of use of these facilities can be outweighed by the limited cover, lack of negotiation, and inflexibility of the product.
How can MGB help
- Our claims team is in-house
- We understand complicated financial information and group structures
- We understand the range of products available and will guide you through common problems and pitfalls
- We can access both company and Lloyd’s insurers to place a wide variety of risks
- We’ll help you understand and sell the full range of Management Liability covers so feel comfortable cross-selling the various covers to your clients and won’t lose out on business.
The difference between Management Liability and Directors & Officers policies
Management Liability (ML) is a portfolio of covers that protect a company, its directors, officers and executives from the risks involved in running a business. This portfolio is often modular and sections can be added to the Directors & Officers cover, which is at the heart of the package. The policy will commonly include:
Corporate Legal Liability cover
This section provides cover for claims brought against the company arising from things like regulatory actions (including health and safety, trading standards and environmental matters), the cost of attending an official investigation, the operation or administration of a company pension scheme, breach of data protection and claims by investors and shareholders as well as third parties.
Employment Practices Liability
The Employment Practices Liability (EPL) section provides cover for disputes arising from the employment practices of the business including unfair or wrongful dismissal, discrimination and redundancy. It extends to cover the costs of defending claims as well as any awards or settlements made and will provide cover for certain expenses – for example the costs of attendance at official employment investigations.
EPL claims are commonplace and need to be handled sensitively; work with MGB and our expert, in-house claims team will provide professional, discreet guidance whenever you or your client needs it.
Many Management Liability policies also provide protection against employee dishonesty although cover varies between insurers. Contact the specialists at MGB with any specific employee dishonesty or crime cover requirements.