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Management liability insurance

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Management Liability

Management liability insurance

Management liability insurance protects directors, officers, and the company itself against potential liabilities which might arise from the management activities of a company.

Why is management liability insurance important?

Management decisions can sometimes lead to financial loss, legal issues, or harm to someone’s reputation. Even with the best intentions, mistakes can happen. Management liability insurance acts as a safety net, ensuring that if things go wrong because of a management decision, the financial burden doesn’t cripple the company or its leaders.

It’s crucial to have management liability insurance if your business:

  • Employs several people.
  • Handles significant funds.
  • Operates in regulated sectors.
  • Has multiple stakeholders

What does management liability insurance cover?

Each management liability policy differs however here are covers that typically included: 

Directors and officers liability

Directors and officers insurance safeguards the leaders of a company, the Directors and Officers, against claims suggesting they acted wrongly. This could mean they did something they shouldn’t have or failed to do something they should have.

Company liability

While Directors and Officers Liability protects the leaders, Company Liability covers the business entity. If someone believes the company itself did something wrong, this cover kicks in.

Employment Practices Liability

Every employer strives to maintain a safe and fair workplace. But disputes can arise. Employment disputes cover ensures that the company is protected against claims like wrongful dismissal or discrimination.

Crime Cover

Businesses can sometimes suffer financial loss due to dishonest acts by employees or outsiders. This cover offers a safety net.

Tax Audit Cover

The Inland Revenue Department may decide to audit a company. This cover helps in managing the costs associated with such audits.

Occupational Health & Safety Defence Costs

Legal representation is essential when facing investigations from WorkSafe. This cover ensures companies don’t face these costs alone.

Trustee Cover

For those who manage superannuation funds, this cover provides an added layer of protection.

How much does management liability insurance cost in NZ?

Management liability insurance premiums are calculated on several different factors including:

  • Size of company
  • Types of security
  • Industry operating in
  • Claims history

Management liability insurance in NZ typically costs between $50 to $100 per month.

Who needs management liability insurance?

Any business, regardless of size, can benefit. However, it’s particularly vital for companies with significant assets, those in industries with higher risks, or any company wishing to protect its leaders and financial health from potential claims.

 No. While both provide protection against claims, management liability focuses on the decisions made by leaders. Professional indemnity covers claims against professional advice or services.

Not always. It covers defense costs, settlements, or judgments up to the policy’s limit. It’s crucial to understand the specifics of your policy.

How do I get proof of management liability insurance?

You can usually get proof of insurance same day when you purchase business management liability through Gerrards.

Acquiring management liability cover from traditional insurance brokers may require a few weeks, a delay that could create problems for policyholders who need instant insurance proof of management liability for a contract. 

To obtain insurance coverage promptly, contact us. We may require you to provide some fundamental details about your business, such as:

  • The name of your business
  • Company structure 
  • Turnover
  • Financial statements 
  • Risk management strategies
 
Once you accept a quote we will issue you with a certificate of management liability insurance. 

What does management liability insurance not cover?

Intentional Illegal Acts

If a leader intentionally breaks the law, this isn’t covered.

Prior Known Claims

If you knew about a claim before the policy started, it’s generally excluded.

Bodily Injury & Property Damage

These are typically covered under general liability policies.

Contractual Liabilities

Liabilities assumed solely due to a contract might be excluded.

Claims from Specific Entities

Some policies exclude claims made by specific entities, such as major shareholders.

Other common questions about management liability insurance NZ

Yes, insurers offer different policies limits and covers under a management liability package depending on the business and your personal preferences. For example Dual Insurance has gold and platinum tiers of cover.  

No, coverage usually begins from the policy’s start date unless specified otherwise.

Regularly review your policy. If there are significant changes, your coverage and premiums might need adjustments.

Management liability often focuses on company leaders. However, some aspects, like crime coverage, may pertain to all employees.

Most policies allow cancellations, but it’s essential to check any conditions or penalties.

View more frequently asked management liability insurance questions here.

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