Management Liability insurance

What is it?

Traditionally known as Directors & Officers Insurance, it covers exposures faced by directors, senior managers and officers of charities, boards and committees if a negligence claim is brought against them in court or at an employment tribunal.                

Most directors concentrate on the liability of the business – in terms of fire, theft or flood to ensure the business will survive but without considering their own personal liability however being an officer of an organisation (director or senior manager) can result in you personally facing allegations of a range of wrongful acts, by various different parties.

These allegations can come from various angles – shareholders, creditors, investors, regulators or even employees, and being made against you personally, so it is your own personal wealth and assets at stake.

Wrongful acts could be anything including:

• breach of trust or duty
• neglect
• error
• misleading statements
• wrongful trading

 Do I need it?

If your company has directors or key managers, directors’ and officers’ liability insurance is recommended because directors and officers have specific duties, responsibilities and powers relating to their positions and if they are found to have acted outside of their terms of reference, civil, criminal or regulatory proceedings can be brought against them.

Without insurance, directors face a greater risk of not being able to defend themselves against:

• disqualification from holding the position of director
• civil proceedings which can lead to hefty legal costs and awards for damages
• criminal prosecution which can lead to fines and possible imprisonment

Extensions to cover

• Corporate liability – Cover for claims made against your limited company.
• Employment practice liability – Cover for legal defence costs and compensation awards made by employment tribunals, employee discrimination.
• Cyber risks -Your cover can include first-party losses such as cyber extortion and fraud and third-party losses such as privacy breaches.
• Criminal activity – Optional protection against losses arising from employee theft belonging to you or your clients.

Cover limit

I the ever more litigious society it is important to make sure your Directors & Officers Liability limit is sufficient. The general recommendation is the limit chosen should be equal to the gross assets of the company but it varies from £500,000 to £10,000,000.

At Eaglemat, we bring in-depth knowledge of your sector and work with a carefully selected panel of market-leading insurers and specialist providers to find the right cover for you. Let us handle the hard work so you can focus on what matters most. For a personalised quote, give us a call on 0116 507 8701 or simply fill out the form below — we’re here and happy to help.