Protecting your Business with Management Liability Insurance
The vast majority of business owners understand the necessity of insurance policies and take advantage of IA’s SME Business Insurance Pack. However, there are other insurance policies that are either not well known or less understood but can be just as relevant to SMEs. One of these policies is our Management Liability Insurance that’s aimed at company directors and managers.
The biggest reason why this insurance cover isn’t well known is because many SMEs believe that it’s simply not relevant to their situation. After all, even though litigation seems to be on the increase, it usually happens to the big multi-nationals, doesn’t it? Well, that might have been true in the past, but unfortunately, SMEs are increasingly being placed in the firing line.
Why do SMEs need Management Liability Insurance?
Management Liability Insurance is specifically aimed at a business’s management, as this is a significant risk for all businesses, including SMEs. If your business doesn’t have this specific insurance it can leave owners, directors and managers personally liable, placing their own personal assets at risk, even if they have left the company. How can this happen? Well, what if one of your employees sues you for unfair dismissal, bullying in the workplace or sexual discrimination, even sexual harassment? Which of your current insurance policies would cover you for these accusations?
Multi-nationals can absorb these costs if they have to, but they usually have the right insurance cover in place. SMEs on the other hand, often don’t have the financial resources to cover the legal costs of these allegations, let alone any compensation. Just image a small family run business with half a dozen employees and how they would struggle financially to defend themselves against these type of accusations in court. With more people now willing to make accusations and go to court, SMEs need to lower their risks with the right type of insurance protection.
So what is Management Liability Insurance?
Management Liability Insurance is a policy that covers owners, directors and managers, as well as the company against risks associated with managing a business. Just as our SME Busines Insurance Pack bundles together a range of different policies to make it easier for businesses to reduce their business risks, a Management Liability Insurance Pack also bundles together a range of essential policies aimed at business management risks.
These policies include Directors & Officers Liability, Corporate Liability, Employment Practices Liability, Statutory Liability, Trustees Liability, Internet Liability, Crime, and Kidnap, Ransom & Extortion.
Essentially, the Management Liability Insurance Pack covers senior management against the costs of defending a variety of claims. Apart from the allegations mentioned above, this insurance pack also covers senior management against legal claims for damages or money owed, penalties for regulatory non-compliance and tax audits, as well as the costs, fees, fines, penalties and compensation involved in these cases. The costs don’t stop there, because you might need policy advice and a full investigation, even a forensic investigation. Then there’s also the damage to your reputation and the help you may need to contain the fallout from these allegations. Even if the claims made against your company or senior management are unfounded, the costs to your business can be enormous.
To decide whether Management Liability Insurance is suitable for your business, talk to an insurance specialist today. Contact Gail Findlay.