What Is Management Liability Insurance (And Do You Need It)?

Management liability is essentially leadership insurance.

This is neither a perfect, nor official definition.

It does, however, capture the essence of what management liability insurance is intended to do:

Protect leadership from exposures due to common business operations NOT covered under a commercial general liability policy.

Watch the video or keep reading to learn more…

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Management Liability Insurance

Management liability is a hybrid policy that combines several coverages essential to standard business operations that are normally sold individually. Policies commonly include:

  • Directors and Officers Liability: Covers losses caused by a director or officer’s alleged mismanagement or improper conduct.
  • Employment Practices Liability: Covers losses resulting from employment practices disputes, such as claims filed for discrimination, sexual harassment and wrongful termination.
  • Fiduciary Liability: Covers losses resulting from mismanagement of employee benefit and pension plans.
  • Professional Liability (also Errors and Omissions): Covers losses resulting from negligent acts, omissions or errors.
  • Crime Insurance: Covers losses resulting from employee or outsider criminal activity such as theft, fraud, forgery and employee dishonesty. 

Benefits of Management Liability Insurance

Management liability policies can offer a level of protection not available through individual coverages.

The combined nature of the policies allows for fewer gaps and broader coverage definitions. Because smaller organizations statistically have fewer of these types of claims, it may also come at a reduced cost when compared with buying all of the included coverages individually.

While the exposures will always be there, smaller businesses are unlikely to need every form of coverage every year.

Combined policies share coverage between exposures to reduce premium costs.

The Rub

There is no single standard policy for management liability insurance, making coverage comparison essential.

Management liability is the type of policy you must spend time on with your insurance professional. The nuances of your business matter when choosing which carrier to place your insurance with as each will strengths and weaknesses and cost differences.

If your current insurance professional has never addressed these issues with you before, then I’d encourage you to reach out to us at Rogue Risk, today.

I hope this article helped you better understand management liability insurance.

Thank you,

Ryan Hanley

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