Management Liability Insurance

Company directors and business managers face increasing scrutiny and legal risks in their decision-making. Whether from employees, clients, shareholders, or regulators, claims of mismanagement, misconduct, or breaches of duty can lead to costly legal battles.

Management Liability Insurance (MLI) helps safeguard company managers by covering legal costs, penalties, and damages associated with these claims. Without proper liability management, you may leave yourself at risk of losing both your business and personal assets.

What does Management Liability Insurance cover?

Management Liability Insurance helps protect company directors, business managers, and officers from personal financial loss due to claims arising from managing a business.

A Management Liability Insurance policy typically covers:

• Damages and claimant costs awarded against you
• Legal liability and costs
• Investigation costs
• Civil fines and financial penalties
• Representation costs where you are legally required to attend an inquiry or investigation regarding company affairs

This type of insurance is particularly important for proprietary/private companies and typically includes Directors and Officers Insurance, as well as the policy types below.

• Directors and Officers Liabilities:
  Protects past, present and future Directors and Officers plus anyone else involved in the management of a company for claims of wrongful acts. Claim examples include unfair competition, fraud, manslaughter and insolvent trading.
• Employment Practices Liabilities:
  Covers the company, Directors, Officers and employees for claims made by current, past and future employees. Claim examples include bullying, harassment, unfair dismissal and discrimination.
• Statutory Liabilities:
  Covers individuals and the company for fines from operating the business including workers compensation and occupational health and safety fines. Claim examples include OH&S fines, environmental fines and civil penalties.
• Crime Cover:
  Covers the company for loss from dishonest acts including theft and fraud by your employees.
• Corporate Entity Liabilities:
  Covers the company for mismanagement allegations such as fraud and shareholder disputes. This is extremely important for companies owned by Directors involved in the business because a claim made against the company is often also made against the owner or Director. Claim examples include wrongful acts, fraud and shareholder disputes.

Do I need Management Liability Insurance?

If you are a company director, business manager, or sit on the board of a private/proprietary company, Management Liability Insurance is an essential safeguard.

Legal claims can arise unexpectedly from employees, shareholders, regulators, or third parties, and the financial impact—including legal fees and potential damages—can be severe. Having the right cover in place helps protect both your business and personal assets from unforeseen risks.

Claims against you or your business could include:

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Important Tips

• Please note that not all liabilities by a Director or Officer impact the company itself.
• Managers and employees can also be liable in addition to Directors and Officers.
• Directors and Officers are often unaware of their full regulatory responsibilities due to the constantly changing environment.

Note - Management Liability Insurance is different from Professional Indemnity Insurance.

• Management liability Insurance covers you against allegations you mismanaged your company.
• Professional Indemnity Insurance protects you against claims from clients and third parties regarding professional advice or services you’ve provided. To find out more, visit our Professional Indemnity Page.