Managers, shareholders and directors bear a significant amount of legal risk, with an increasing number of higher-ups being accused of unfair business practices, mismanaging funds, releasing private information and other issues. When these accusations arise, the company is forced to bear the financial burden. From costly defense fees to outstanding settlement awards, the costs associated with management liability claims have the potential to put a company in the red. Management liability insurance is designed to protect companies from significant financial loss resulting from claims relating to daily management decisions.
Management Liability Coverages
Many insurance providers offer stand-alone policies or the option to bundle coverages for more comprehensive protection. The following types of coverage are generally available under a management liability policy:
- Employment Practices Liability
- D&O Coverage
- Fiduciary Liability
- Crime Insurance
Protection From Potential Financial Loss
Executives are responsible for making significant decisions on behalf of the company. From determining how funds are allocated to deciding which company-wide policies to implement, directors make decisions daily that could put them at risk for a legal claim. Unfortunately, a person doesn’t have to be wrong to be sued—they just had to have made someone upset. No matter the reason for the claim, the company is financially responsible for legal fees and subsequent damages. Management liability insurance takes over that responsibility so that companies can continue operating as normal in the face of a lawsuit.