Why you might need management liability insurance
Why you might need management liability insurance
Prospective employee grievance
You’re advertising a new PR executive role externally and internally. Once all shortlisted candidates have been interviewed, you finalise your decision with the help of HR. You then notify all candidates of the outcome.
Unfortunately, an unsuccessful candidate files a claim that they’d been discriminated against and deprived of a career opportunity.
This is where employment practices liability insurance from the management liability cover portfolio can help. The cover can support with awards and the legal costs of the claim and investigations.
A tax investigation
As the owner of a plumbing business, your team of plumbers visit multiple businesses and private homes each week. It’s busy work, but you regularly update your finances and business tax records.
However, HMRC contacts you to say there are discrepancies with payments and expenses claimed. Tax officials then launch an investigation.
By adding corporate legal liability insurance to your policy, you’ll have help with legal representation costs incurred because of the investigation.
Charity accusation of mismanagement
Being in a position of responsibility for a non-profit can be rewarding. However, it can also come with potential risks – personal claims for mismanagement being one of them.
So, when you are accused of mishandling charity funds, a negligence claim lands at your door.
Trustee liability insurance can help cover the cost of defending and settling the claim. This includes paying compensation.
How does management liability insurance work?
There is no individual policy called management liability insurance available at Hiscox. This is a management liability insurance portfolio that features five types of cover. These five insurance types deal with different claims relating to the management of an organisation.
Some management liability coverage is appropriate for not-for-profit organisations, while others suit for-profit companies.
For-profit companies can have:
- Directors’ and officers’ insurance
- Corporate legal liability insurance
- Employment practices liability insurance.
Non-profit organisations can have:
- Trustee liability insurance
- Professional and legal liability insurance
- Employment practices liability insurance.
Please note these management liability insurance policies are not available to buy online. Contact our customer services team if you have questions about how to purchase this cover.
You can get a quote and arrange cover by calling our insurance experts on 0808 2736 570 Monday to Friday between 9 am and 5 pm.
What management liability insurance is available
What management liability insurance is available
Directors’ and officers’ (D&O) insurance
D&O insurance can help to cover the potential costs of claims made personally against key people within your organisation. For example, a managing director (MD), a chief operating officer (COO), a chief financial officer (CFO), any non-executive directors, officers or even your employees.
They may face accusations they’ve breached a duty of care, breached some regulations or they could’ve defamed a competitor.
Directors’ and officers’ insurance can help with the costs of claims against company leaders.
Corporate legal liability insurance
A corporate legal liability (CLL) claim could come against the business entity from various sources. For example, it might be a competitor claim for breaching data protection regulations. Or the Health & Safety Executive could conduct an investigation following an injury to an employee.
CLL insurance can help with claims made against the company, rather than individuals. It covers both defence costs and awards made against the entity.
Trustee liability insurance
Working in a high-profile position for a charity can be rewarding. However, risks such as being investigated or being accused of negligence can come with the territory.
Trustee liability insurance can help with the cost of defending a claim when a key person in a not-for-profit organisation is personally accused of a wrongful act.
Professional and legal liability insurance
Professional and legal liability insurance is similar to corporate legal liability cover. However, it’s designed for charities and non-profits, rather than for-profit companies.
This cover can protect your organisation against claims that could come from multiple sources. For example, an investigation from a regulator.
Employment practices liability insurance
When you employ people, there’s a risk they may allege that your business has mishandled their employment. From claims of wrongful dismissal and discrimination to a breached contract.
In this case, employment practices liability insurance can help support your business or charity against claims from prospective, current, or former employees.
Related articles and guides
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Discover what a contract of employment is and what it needs to include with this Hiscox guide.
Small business guide to GDPR
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