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Management Liability Insurance for Australian Businesses

Learn more about management liability insurance and how it can help protect your business and managers from mismanagement allegations.

What is Management Liability Insurance?

Management liability insurance is designed to help protect managers of a business against claims arising from alleged wrongful acts. Management liability policies also operate to help protect the business itself where it is named in claims arising from alleged wrongful acts.

Management liability policies can provide a variety of cover for mismanagement allegations and legal actions such as:

  • Claims for wrongful acts, including breach of duty brought against past, present and future directors
  • Allegations of employment practices and wrongful acts (e.g. wrongful dismissal, harassment or discrimination)
  • Crime  (e.g. fraud, theft)
  • Statutory liability (breaching various Australian statutes where legally insurable)
  • Regulatory body investigations

Take for instance the following claims example. An employee files a claim against the business for unfair dismissal, where they claim they were discriminated against by their manager. Whether or not these allegations are proved, the employer and management could face significant costs for defending or settling these types of claims. 

What does a Management Liability policy typically cover? 

Directors and Officers Liability Insurance 

Directors and officers liability insurance is designed to help cover directors, senior executives and employees in respect of loss arising from claims made against them in the discharge of their duties on behalf of the company.

Corporate Legal Liability Insurance

Corporate legal liability cover is designed to help protect the company from claims of alleged wrongdoings brought against the company itself.

Employment Practices Liability Insurance

Employment practices liability insurance is designed to help cover both the business and its employees against personal grievance claims brought by current, prospective or former employees for allegations of wrongful employment acts.

Trustees Liability Insurance

Trustees liability insurance helps cover trustees against claims for liability arising from alleged “Wrongful Acts” in performing their duties as trustees. Reimbursement cover is provided to the trust where it provides an indemnity to trustees in accordance with the indemnity provisions of the trust deed.

Statutory Liability Insurance

Statutory liability insurance is designed to help cover organisations, their directors, executives and employees against liability arising out of unintentional breach of various Australian statutes (where insurable under the relevant legislation).

Crime Insurance

Crime insurance is designed to help cover organisations against fraud or theft by employees or third parties.

Policy inclusions and coverage limits will vary between different insurers and different policies.  Marsh strongly recommends comparing product disclosure statements before choosing a management liability policy.

The Marsh Broker Value

Marsh’s team of professional insurance brokers, advisory and risk management experts are dedicated to helping Australian small to medium businesses like yours. We help our clients identify and arrange suitable management liability insurance quotes from various insurers and provide advice and recommendations to our clients. Our dedicated team of brokers across Australia can utilise their localised industry experience and insights to negotiate competitive premiums and coverage to deliver value to your business.

In addition to arranging quotations and placing the policies, Marsh can also provide claims advocacy and support. Our team can assist you when making claims by helping to manage, negotiate and settle claims with insurers on your behalf.

Request a quote

Frequently Asked Questions

Who needs Management Liability Insurance?

No matter the industry, every business should consider the merits of management liability insurance for their company.

There is increasing pressure on small to medium businesses to ensure they are running their business as efficiently as possible while also meeting the ongoing needs of various stakeholders. Having to wear multiple hats as a business owner can heighten this pressure and lead to unintended mismanagement or mistakes.

Speak to one of our experienced advisers to see if a management liability policy is relevant for your business.

What is the difference between Management Liability Insurance and Professional Indemnity Insurance?

Although insurance purchasers sometimes confuse management liability and professional indemnity policies, they are by no means interchangeable. To put it simply, management liability insurance helps cover the management of a business, whereas professional indemnity insurance helps cover the services and advice offered by a business and its employees.

Find out more about professional indemnity insurance here.

How much does Management Liability Insurance cost?

There are a variety of factors that can affect the cost of management liability insurance. These factors include the size, revenue and extent of risk exposures your business may face.

It is important to ensure that when requesting a quote, you accurately declare the relevant values so the correct premium and cover for your business can be arranged.

Speak to one of our experienced advisers to see if a management liability policy is relevant for your business.

What is a run-off period?

Even when a business has ceased trading or is being acquired, liability continues to exist for a period of up to 6 years (in line with the statute of limitations). Because these policies are ‘claims made’ policies a run-off period is a provision in a policy that helps protect the insureds from claims, even after they have left the business, for a specified period of time. 

Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238369) (“MAI”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) which is a related entity of MAI. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from Marsh Advantage Insurance on request.