Management Liability Insurance
Most businesses can be affected by lawsuits. Litigation can extend to the board of directors, the executive team, or the whole company. Management liability insurance transfers this risk from the company to the insurance company. Management liability insurance protects the company’s balance sheet and the management team�s personal assets.
Management liability insurance is a term used for describing some kinds of insurance policies. These policies will protect a corporation�s directors and officers, the corporation and its facilities. Losses resulting from director and officer actions are much more common than you may realize. Several liabilities from which management liability insurance will protect include director’s and officer’s liability, fiduciary liability, and employment practices liability.
Fiduciary liability covers plan trustees and persons who oversee benefit plans. It protects against losses because of a fiduciary�s negligence or omission when administering these plans. This protection includes the employer who is sponsoring the plan or the plan itself. It can protect a person who serves as a director, trustee, or officer of the plan. Fiduciary liability covers employment practices liability including an employee or an applicant. It covers the company against present, past, seasonal, temporary, and part-time employees and volunteers and job applicants.
Things covered by fiduciary liability insurance include sexual harassment, wrongful termination, and violation of an employee�s civil rights. It also includes infliction of emotional distress and depriving employees of career opportunities. Management liability policies are available to firms held privately, nonprofit organizations, and small publicly traded firms had annual sales of less than $25 million.
Without a management liability insurance policy, a business may face much exposure. This exposure could affect working capital, personal assets, or cash reserves. Though most of the risk is from customers, it is not the only risk. Vendors, regulators, shareholders, competitors, and government agencies can file claims against your company. Without management liability insurance, a simple allegation can become time-consuming and costly to defend.