What is Management Liability

Do you need Management Liability Insurance?

Whether your business is small or large, you have probably wondered at some point in time, whether you might need to take out Management Liability Insurance. This type of insurance is designed to protect companies from legal action in response to the improper or careless actions of a company director or officer.

With so many different personalities working together under the same roof, workplaces can be difficult environments with personality conflicts, personal agendas and deep-seated resentments. Managing staff can be challenging and this creates risks for any business owner.

Despite having robust HR policies and excellent staff training in place, it is not possible for a company to entirely remove the risk of management conduct that could expose it to demands to pay massive settlements. Workplace bullying, sexual harassment, unfair dismissal and employee discrimination cases are some of the more common reasons for workplace relations litigation.

Workplace relations laws and regulations have evolved over the years to provide better protection for employees against any unfair treatment by managers. However, workplace injustice and exploitation of employees can still happen in organisations everywhere.

Employees are now more empowered and aware of their rights than ever before. As a director of a for-profit or not-for-profit organisation, you have a duty to treat your staff fairly and reasonably. However, mistakes happen because nobody is perfect.

If either you or your management team was to make an error of judgement and say the wrong thing, or unintentionally act in a discriminating way, towards a staff member, your organisation could be subject to legal demands for reparation. These demands can even be made directly against company directors and officers exposing them to personal liability.

Why you need Management Liability Insurance

More and more company directors are realising the importance of having Management Liability Insurance coverage to safeguard their organisation’s interests in the event of employee-initiated litigation.

If you are a Manufacturer, Engineer, Retailer, Information Technology Consultant, Director of a Construction company, Mortgage Broker or any other type of business owner, then taking out a Management Liability Insurance policy is a prudent risk management decision.

Management Liability Insurance provides financial protection for your business should you or one of your management team be found to have acted wrongfully towards an employee.

If a claim is made, your insurer may cover any court-imposed compensation or settlements including legal defence costs.

At Berkley Insurance Australia, we partner with panel lawyers who represent our clients in legal actions commenced against them by claimants. Our panel lawyers are experienced at dispute resolution and can engage with the claimant’s lawyers to resolve the legal action before it proceeds to a final contested hearing at a court or tribunal.

As a specialist liability insurer, Berkley Insurance Australia can tailor a Management Liability Insurance policy to suit our client’s needs.

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