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Monday, 27 May 2019
Management Liability easier to read as Defence Liability
When you’re running a business, you may be personally liable for any actual or alleged breaches of the Corporations Act. And it’s not just large companies that are exposed – small and medium business owners and officers could be at risk as well.
Management Liability insurance covers the costs of defending directors, managers and employees against any claims that are the result of their actions or decisions. Management Liability / Professional Liability / D&O and the like ... often referred to as "Defence Liability" BECOZ more often than not its only LEGAL COSTS in defending the claim which on average are around $29,000 against an average premium of $2,500
Why do I need it? If you are faced with unexpected liability costs, Management Liability insurance can protect your business and personal assets, such as your home, from being sold to cover the cost of paying claims.
Did you know? Many businesses think it won’t happen to them, but statistics show otherwise. In fact:
The likelihood of a claim that could be covered by a Management Liability policy has tripled in the last 5 years, with 50% of notifications resulting in a claim (Chubb 2016 Private Company Risk Survey).
The most common claims are for employment practices like bullying, harassment and wrongful dismissal (Chubb 2016 Private Company Risk Survey).
Major claims by amount relate to crime – including employee fraud (Chubb 2016 Private Company Risk Survey).
Penalties awarded against companies and its directors or officers for work health safety breaches have increased by 43% to $22.3 million in one year. Penalties now average $62,000 per company (Safe Work Australia, Key Work Health Safety Statistics 2014).
The types of covers included in Management Liability Insurance policies can vary between insurer but generally, cover can be provided for:
Employment Practices Liability Covers payouts for claims of employment breaches, such as wrongful dismissal, bullying and discrimination.
Directors’ and Officers’ Liability
Protects your proprietary limited company’s past, present and future directors, officers and managers against claims of wrongful acts, such as misrepresentation or breach of duty (subject to business size).
Crime Protects your business against claims such as employee or third party fraud (not all criminal activity is covered).
Corporate Liability Covers costs that your business would incur if you need to defend and settle claims from outside parties alleging wrongful conduct, as well as investigation into the affairs of the company.
Statutory Liability Covers the cost of defence, fines and penalties under some statutes (eg. Work Health and Safety).
Defence Costs Covers your legal costs if your business ends up in court.
Recommended Steadfast member Broker in Perth WA Western Australia