The word “liability” seems to be in constant circulation when talking about business insurance and charity insurance. You need to cover your responsibilities for your employees, members of the public, the products you sell or distribute, and your actions as a company or even as a charity. That’s a lot of liabilities to consider.
It is the third that we’re going to be focusing on – your actions as a company – as this is where Management Liability comes into play.
As a business, you might already have your Public, Employers’ and Product Liability in place. Management Liability covers key individuals as well as the entity of a business, for a whole host of issues surrounding decisions carried out, mistakes made, and wrongful activities that are unfolding.
Because these areas can be so complex, and the legislations around them very specific, a Management Liability policy tends to be split into three levels of cover, Directors and Officers Insurance, Employment Practices Liability and Corporate Legal Liability. Let’s take a quick look at what each of these entails:
Directors and Officers Insurance – The Individual
Directors, business owners and senior management could take decisions, or make errors or omissions that land them in hot water legally. Accusations of alleged wrongdoings can come from many different sources, including other directors and shareholders, and it can be the individual who is personally held accountable. Directors and Officers Insurance protects them from any large defence or compensation costs, fines or penalties, providing the allegation doesn’t relate to any intentional breaches, such as fraud.
Corporate Legal Liability – The Company
If there is a claim for fraud, and the company comes under fire for the wrongdoings of an employee, then Corporate Legal Liability will cover them for any subsequent legal action. It also protects for other violations, such as water contamination, passing off and trespassing, if, for example, a company has been laying pipes on someone else’s property.
Employment Practices Liability – The Employee
So complex are the legislations around employment law, that dedicated insurance can certainly show its worth. Employment Practices Liability covers unfair dismissal, sexual harassment, and discrimination among other employment issues. With claims of unfair dismissal so common, it’s not a cover option to be missed off the checklist, as it could save your business from large costs in the longer term.
Hopefully this makes Management Liability Insurance a little bit clearer, but the team at Edwards Insurance would be very happy to inform you further.
Call us on 01564 730 900 or email enquiries@edwardsinsurance.co.uk to find out more.