Management Liability Insurance at a Glance
What is Management Liability Insurance?
Management Liability insurance protects businesses and their leaders from a range of risks related to managing and operating a company. It covers exposures related to governance, finance, benefits, and management activities, including D&O liability insurance, EPL insurance, fiduciary liability insurance, and special crime insurance. These coverages can be purchased separately or as part of a single "package" policy, and protect against claims of mismanagement.
This insurance is important for any business, regardless of size or industry, as all management decisions and relationships involve some level of risk. By transferring that risk to an insurance policy, companies and executives can protect their finances and personal assets from potential litigation and legal disputes.
What you should consider?
Everyday management decisions and business relationships involve inherent risks. Litigation against a company, its executive team, and board of directors can affect businesses of all sizes and industries. Management liability insurance is a cost-effective tool that all companies and executives should understand to transfer these risks. It provides protection for both the company balance sheet and the personal assets of the management team.
Did you know?
According to the IoD’s 2018 Directors’ Fees Report, 76% of organisations provide directors with liability insurance.
(Minter Ellison Rudd Watts, Marsh and the Institute of Directors in New Zealand 2018)
From 2018 to September 2019, there were 147,256,363 claims related to liability defamation, directors and officers, public product, and others.
(Insurance Council of New Zealand 2020)
The Mainzeal judgment of the High Court of New Zealand held company directors jointly and severally liable for damages of NZ$36 million, highlighting the risks faced by board members in jurisdictions not renowned for hostile litigation environments.
(Willis Towers Watson New Zealand insurance market report 2019)
What are the types of covers available?
Directors & Officers Liability
This policy covers legal liability and expenses related to defending claims against directors and officers for alleged wrongful acts in their capacity as corporate leaders. It also protects the personal assets of the individuals and the assets of the corporation.
Comprehensive Coverage
This policy provides a range of coverage options for private companies, including Directors & Officers Liability, Entity Liability, Employment Practices Liability, Fidelity, Kidnap, Ransom, and Extortion (including cyber extortion), Statutory Liability, Employer's Liability, General Liability, and Umbrella Defense Costs.
What can it cover?
Some of the benefits of Management Liability insurance policy may include:
| Potential Benefits |
|---|
| Cover for investigations, inquiries, and prosecutions. |
| Cover for libel and slander. |
| Loss of documents. |
| Outside Directorship extension available. |
| Advancement of defense costs. |
| Cover the cost of investigating, defending, and settling claims by a third party. |
What is usually not covered?
CASE STUDY
A software startup in New Zealand sought outside investment based on a healthy 35% growth projection in topline revenue for the next year provided by the CFO. Encouraged by this forecast, investors buy in, and the company successfully closes its funding round. However, the growth projection does not materialize, and investors sue the company and its directors for misrepresenting the company's revenues. Fortunately, the company has management liability insurance, which provides Directors & Officers coverage for legal costs or settlements.
Why choose FG Insurance?
- Peace of Mind at Affordable Rates
- Flexible Plans
- 24/7 Roadside Assistance
- Fast and Simple Claim Service - online or by phone
- Modern Policy Wordings
- Competitive Pricing