Why you might need management liability insurance
Why you might need management liability insurance
From employment disputes to regulatory investigations, management liability claims can arise from everyday activities.
Prospective employee grievance
You advertise a new role and interview internal and external candidates. After notifying applicants of the outcome, one unsuccessful candidate alleges discrimination and files a grievance. They may believe the process was biased or influenced by protected characteristics (external link).
This is where employment practices liability insurance can help. It may support the cost of legal representation, investigations, and any compensation awarded. Even unfounded claims require proper investigation, which can quickly become expensive without cover.
A health and safety investigation
You run a cookery school with a professional kitchen and training facility. During routine operations, a serious incident occurs that results in a fatality. The police and Health and Safety Executive begin an investigation under the Corporate Manslaughter and Homicide Act 2007 and the Health & Safety at Work etc Act.
Even with robust safety procedures in place, serious incidents can happen. An investigation of this nature can be lengthy, complex, and costly for both the business and its leaders.
Whilst Management liability policies will never pick up the actual bodily injury or property damage type claim, corporate legal liability insurance and directors' and officers' insurance may help cover the legal costs of an investigation.
Startup accused of misleading investors
Your fast-growing tech startup seeks funding to expand operations. After an investment round, an investor accuses your leadership team of misrepresenting growth figures and files a claim for damages.
Directors' and officers' liability insurance may help cover defence costs and protect personal assets for those named in the claim.
How does management liability insurance work?
At Hiscox, our insurance portfolio includes five distinct cover types, each designed to respond to different risks and tailored to either limited companies or not-for-profit organisations.
For limited companies:
- Directors’ and officers’ insurance
- Corporate legal liability insurance
- Employment practices liability insurance
For not-for-profits:
- Trustee liability insurance
- Professional and legal liability insurance
- Employment practices liability insurance
Please refer to the policy documents for the full terms of this cover, including inclusions and exclusions. You can also contact our customer service team for more information.
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What management liability insurance is available
What management liability insurance is available
Directors' and officers' insurance
Directors’ and officers’ insurance can help cover the cost of claims made personally against company leaders, including managing directors, non-executive directors, and officers. These individuals make important decisions on behalf of the organisation and can face personal liability.
Allegations might include breaches of duty, care, trust, negligent errors, and regulatory failings. This insurance may support legal defence costs and compensation potentially due to third parties.
Corporate legal liability insurance
This insurance applies to the company as a separate legal entity. Claims may originate from regulators, competitors, or other third parties. For example, a workplace injury could result in legal action against the organisation.
Corporate liability insurance can help with claims made against the company, rather than individuals. It can cover both legal costs and any compensation awards made.
Trustee liability insurance
Charity trustees can face personal liability for governance or financial decisions. If a trustee is personally accused of a wrongful act, such as mismanagement of charitable funds, this cover can help with legal and compensation costs.
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 arising from multiple sources, such as regulatory investigations.
Employment practices liability insurance
Employers risk claims of mishandling employment. This insurance may help if your organisation faces allegations such as wrongful dismissal, breach of contract, or discrimination.
Employment practices liability insurance can support your business or charity against claims from prospective, current, or former employees.
Why choose Hiscox management liability cover?
Things can go wrong – even when you’ve done your best.
Whether you run a business or a charity, our management liability portfolio can help protect you, your leaders, and your organisation.
With Hiscox, you can get:
- A flexible portfolio of cover types.
- A team of specialist claims experts.
We also want to help your business thrive. Innovation and service matter to us, so we’ve created tools like the Hiscox Risk Academy to support our customers.
Hiscox holds Chartered Insurer status and is a proud winner of the Feefo Platinum Trusted Service Award 2025, based on customer feedback.
Management Liability Insurance FAQs
What could happen without management liability insurance?
Claims or investigations could leave directors or trustees personally liable and expose the organisation to significant legal costs that could threaten its financial stability.
What is the difference between management liability insurance and professional indemnity insurance?
Management liability can cover claims related to the governance of an organisation. Professional indemnity helps to cover claims about professional advice or services delivered to clients.
Is management liability insurance worth it?
If your organisation has directors, employees, or legal responsibilities, this cover may help protect against complex and costly claims that could otherwise threaten the business, as well as the personal assets of company and charity leaders.
Who needs management liability insurance?
Directors, officers of limited companies, and trustees of non-profits that employ staff, handle public funds, or operate under regulatory oversight may benefit from this cover.
What is the difference between management liability insurance and Directors’ and Officers’ insurance?
Directors’ and Officers’ insurance is one part of the management liability portfolio. It covers individuals – specifically, company leaders. Management liability includes additional cover types, such as entity-level protection and employment practices liability.
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