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Management Liability Insurance: What You Need to Know

Management liability insurance is designed to protect the board of directors and other key personnel within an organization if they make a mistake that puts the company at risk. In most situations, members of management make great decisions that keep the company functioning at full speed. However, there are times when poor choices might result in third-party bodily injury or property damages.

What Is Covered under Management Liability Insurance?

Management liability insurance covers many types of liability arising from poor judgment made by members of management. False claims, defamatory statements, contract breaches, and the release of inaccurate information to the public are all possible scenarios in which management liability insurance may be called into play.

The common coverages offered by management liability insurance include:

  1. Kidnap and Ransom Insurance- Protects your business from losses incurred due to kidnapping, extortion, or ransom demands
  2. Commercial Crime Insurance- Protects your business property from losses caused by third-party frauds or dishonest employees.
  3. Fiduciary Liability Insurance- Protects your business and employees in fiduciary roles when they are held liable for failing their duties
  4. Employment Practices Liability Insurance- Protects your business from employee-related lawsuits involving discriminatory behavior, workplace harassment, etc.
  5. Directors and Officers Liability Insurance- Protects directors and other officers when they are accused of misconduct or management errors

How Much Does Management Liability Insurance Cost?

The cost of your management liability insurance policy will depend on several factors, including but not limited to

  • The size of your business
  • Your management team
  • The amount of deductible you choose to work with
  • The type of risks your company faces
  • The net worth of your business

These factors will also help you decide the amount of liability protection you need to have for your management team.

COVID-19 and Increase in Management-related Challenges

COVID-19 has brought about many different challenges when it comes to effectively managing a business and handling other work-related liabilities. While offering the option to work from home protected most of the employees from becoming a victim of COVID-19 in the workplace, the management had to take drastic measures to avoid the closure of their business. Nevertheless, with vaccinations and resumption of work from office, the management faces new challenges related to bringing employees back into the workplace. They now need to evaluate the risk of bringing workers back while ensuring that proper coverage is in place to protect the business.

Why Is Management Liability Insurance So Important in Today’s World?

Financial loss due to a lawsuit can be devastating to your business. In the present litigation-prone world, having a good management liability insurance policy in place will protect your company and its assets if the worst scenario occurs and you are sued. Knowing your risks and protecting your assets are the keys to securing your company.

When it’s time to review your company’s insurance policies, call the agents of CF&P Insurance Brokers and go over your existing management liability insurance policy. Our experts will help you understand all of the details included in your policy and provide you with options that may benefit your business. Call us today and schedule your appointment.

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