Management liability insurance protects directors and officers and the company itself from the many exposures relating to the management of a company. Anyone who owns or is involved in the management of a company carries specific responsibilities which may leave them personally liable for any alleged or actual wrong doing.
Managing business risks is critical to the overall performance of a business. Most companies insure the tangible exposures of property damage and bodily injury but neglect to insure against other legal and financial liabilities as a result of the management, operation and/or ownership of a business. These liabilities often arise out of disputes that can involve expensive, complicated and lengthy litigation which can disrupt the operation of the business, and the directors’ and officers’ ability to operate within the business.
These liabilities can potentially put at risk not only the corporations’ assets & reputation but also the personal assets and reputation of individual directors and officers.
They can arise from the enacting of new legislation; regulatory investigations or enquiries, investigations or enquiries conducted by professional or industry bodies; shareholder actions; creditor actions; employee initiated claims alleging discrimination, harassment or unfair dismissal; fines or penalties imposed for breaching a statutory regulation; theft or fraud perpetrated by a director, officer or employee; a breach of the corporations computer network; or liability as a result of acting as a trustee of the corporations superannuation fund.
This is where CGU’s Management Liability Policy is designed to step in to indemnify the corporation and its directors’ & officers’ against the incurring of such legal and financial liabilities. It includes covering the legal and other costs and expenses incurred in the preparation, investigating, defending and or settling of any matter covered by the policy.
CGU’s Management Liability Policy is structured with 7 specific coverage sections tailored to protect both the corporation and its directors and officers:
• Section 3 – Directors & Officers and Company Reimbursement
• Section 4 – Insured Entity Liability
• Section 5 – Employment Practices Liability
• Section 6 – Statutory Liability
• Section 7 – Crime Cover
• Section 8 – Cyber Liability
• Section 9 – Superannuation Trustees Liability
Sections 1 and 2 provide guidance to the policyholder on how to read the policy and the importance of the premium, proposal form and the period of insurance.
Section 10 contains general terms and conditions of the policy, including general policy extensions and definitions.
Each coverage section has specific Extensions and Exclusions within the section so the policyholder and the intermediary of the policyholder have certainty as to what is covered and not covered within the section. There are no exclusions that apply to individual coverage sections that do not sit within the coverage section itself.