Why Do You Need Management Liability?
Managing a business has a large number of exposures associated with it and it is surprising to learn that many clients choose not to cover themselves for actions that may be made against them. This can be easily included in their insurance programs.
A company and its directors face both personal and company liabilities from numerous stakeholders including the following:
- Employees - actions alleging discrimination, harassment, breach of employment contract, defamation, misleading misrepresentation, wrongful discipline, etc;
- Creditors - alleging that the Director allowed the company to trade whilst knowing it could not pay its debts;
- Government Agencies - Directors and Officers may be personally liable for breaches of hundreds of statutes (eg Australian Tax Office, Australian Securities Commission, Trade Practices Commission);
- Competitors - Trade Practices Act claims brought against the Directors for misleading and deceptive type conduct;
- Shareholders - alleging that the Directors mismanaged the operations of the company and its funds.
If there is an alleged breach of company law or regulation, your conduct as a a manager and as a company is questioned. It is possible that a claim is completely without foundation, but it still costs time and money to defend a matter to a successful conclusion. Do you have the resources to fund your own defence?