Businesses operate within the realm of many different risks. From the risk of business disruptions to the risk of harm to a company's employees, business insurance coverage offers protection against associated financial losses that would otherwise negatively affect the business.
An often overlooked coverage for businesses is management liability insurance. Indeed, a business may be sued for the actions of company management regarding their handling of employee affairs, customers, and creditors. Even if these claims are baseless, they can result in lengthy court proceedings that are both expensive and time consuming.
Management liability insurance covers such risks and allows the business to operate smoothly with minimal disruptions. Essential components of a management liability insurance policy include the following features.
Employees are valuable assets to any business, but they can also be a liability in some cases. For example, employees may make claims against the company for wrongful dismissal from their job responsibilities, discrimination in the workplace, harassment, or a breach of their contract. Whether these claims are true or false, they can have significant implications on the company if not appropriately handled.
The employment coverage on a management liability policy covers damages associated with employees and any claims that they make against the company and its management team.
Statutory liability coverage
In some cases, your business may be required to pay fines associated with breaching occupational expectations such as health, safety, and environmental regulations. Inspections by regulatory authorities are often carried out randomly, and your business may be visited at a time when you were unprepared.
These costs and fines can be quite costly to the business. With management liability insurance, you get coverage against these penalties and minimise the disruption to your business.
Coverage for directors and management
The management team often has a lot on their plate. They need to ensure that the company is headed in the right direction while maintaining all its legal responsibilities. It is not uncommon for a director or manager to become entangled in an act such as negligence or breach of official duty.
Such cases can prove costly to the business (in terms of penalties and litigation) if they don't have appropriate liability coverage. A management liability policy should include coverage for the management team in their role at the workplace.
Crime fidelity coverage
In some cases, dishonest or negligent acts in the workplace can result in financial losses in terms of property, securities, and other valuables that belong to the company or have been left in their care. Management liability insurance covers direct financial losses associated with these claims.