Management Liability Insurance

Why choose Howden for Management Liability Insurance?

When it comes to getting management liability insurance cover, as an insurance broker we pride ourselves on doing the heavy lifting, so you don’t have to. Due to the great relationships we have with our selected panel of specialist commercial and liability insurers, we make the process of comparing multiple policies, on your behalf, simple and hassle free. What’s not to like?

We also recognise that each policy needs to be as individual as its owner and their business, and that’s why we provide a personalised service, focused on getting to know you and finding out exactly what you want from your management liability insurance.

Ultimately, just know that we’re here to help, whether you need to purchase a new management liability policy, renew an existing one, or even just make a claim.

Benefits of working with Howden:

• You can trust us – we’re rated Excellent on Trustpilot.
• We’re driven to save you time, money, and hassle.
• Benefit from a tailored service that comparison sites can’t provide.
• Speak with your local insurance broker, within your community.
• We’re right by your side in the event of a claim.

What does Management Liability Insurance cover?

When owning or managing a business, you are exposed to legal actions against the company and/or yourself individually. Management liability insurance is a package policy designed for private companies, LLP’s and sole traders which offers protection against liabilities and financial loss. The policies typically cover:

Directors & Officers Insurance  – claims that affect you, your fellow directors, officers and even employees who have an unlimited personal liability for decisions and actions made on behalf of your company.

Company Legal Liability  – these claims are made involving the company, either as the sole target or jointly with one or more individuals.

Employment Practice Liability  – With an average cost of £20,000, EPL claims can be extremely financially damaging as well as draining management resource and potentially harmful to your company’s reputation.

Legal Advice Line – unlimited calls and an email service.

Management Liability Explained

1. Directors’ and Officers’ Insurance Key Exposures

These claims affect directors, officers and even employees who have an unlimited personal liability for decisions and actions made on behalf of their business.

Insolvency

When a company is insolvent and liquidators or administrators are appointed, they can pursue directors on behalf of the company’s creditors for breach of their statutory duties. Once a company is insolvent, claims may be brought by the administrator or liquidator under the Insolvency Act 1986.

Regulatory investigations and prosecutions

The complex regulatory landscape affects all directors and officers, with regulators having the power to sanction, fine or even imprison for the most serious offences.

Breach of directors’ duties

Directors owe various duties to a company; those duties are now largely set out in the Companies Act and if there’s a directors’ service agreement. Where a director breaches their duties, it’s usually the company itself which takes action to seek a remedy.

In some circumstances, one or more shareholders can make a claim against a director if they have suffered direct personal financial loss that’s different from the loss suffered by the company, or if they believe that other directors will prevent a claim being brought by the company.

2. Corporate Legal Liability Key Exposures

Contract disputes

Minor disputes can escalate, damaging relationships or even threatening the survival of a business. No matter how hard they try to avoid it, the owner and their business may unfortunately end up in court over a contract dispute.

Employment and third-party fraud

Almost one in five small businesses have suffered from loss as a result of fraud by an employee at some point during their history. This can cause significant loss and, in some cases, even destroy a business.

Data protection breaches 

If a business holds and processes information about their clients, employees or suppliers, they’re legally obliged to protect that information. Failure to do so can lead to claims from the Information Commissioners Office or the third parties affected by any breach.

Regulatory investigations and prosecutions

Most regulatory investigations or prosecutions are against companies rather than their directors or officers. Regulators have the power to close a business or impose financially crippling fines. There’s been an increase in activity over recent years and this trend is likely to continue.

3. Employment Practices Liability Key Exposures

Unfair dismissal

Every employee who has the qualifying period of service has the right not to be subject to an unfair dismissal. If an employee feels their dismissal was unfair, they can bring a claim to the Employment Tribunal. Even where there’s a justified reason to dismiss an employee, if a business doesn’t follow correct procedure or process, the dismissal may still be deemed unfair.

Harassment or discrimination

Workers are protected under Employment Law against unlawful discrimination by the Equality Act 2010. Claims can be made in the Employment Tribunal on the grounds of sex, pregnancy/maternity, marriage/civil partnership, gender reassignment, sexual orientation, religion or belief, race, disability and age. This can also include claims brought by unsuccessful candidates applying for roles.

Deductions from wages

Typically arising following dismissal, an employee (or former employee) can bring a claim for unlawful deduction of wages if certain criteria under the Employment Rights Act aren’t met. Typical disputes arise as a result of holiday pay, bonus or commission pay and statutory payments e.g. time off to attend antenatal appointments.

Want to find out more about how we can help? Speak to a member of our specialist team today by either giving us a call on the number above, clicking Get a Quote, or by visiting us in your local Howden branch!