Traditionally known as Directors & Officers Insurance, Management Liability Insurance provides protection for individuals serving as directors, officers, and other executives within a company or organisation. This insurance is designed to safeguard these individuals (often referred to as management) from personal losses in the event they are sued for alleged wrongful acts while managing the company.
The coverage typically includes two main components:
- Directors and Officers Liability (D&O): This protects directors and officers from personal losses (financial and legal) in the event they are sued for alleged wrongful acts, such as errors in judgment, breach of duty, or negligence in managing the company.
- Employment Practices Liability (EPL): This component covers claims related to employment issues, such as discrimination, wrongful termination, sexual harassment, and other employment-related allegations.
Management Liability Insurance is essential because it helps attract and retain talented executives by providing them with some level of protection against personal financial loss in the face of legal action. It also protects the personal assets of the management team, as allegations against individuals can potentially result in significant financial consequences.
It’s important to note that the specific coverage and terms of Management Liability Insurance can vary between insurance providers and policies, so it’s crucial to review and tailor the coverage to meet the company’s specific needs and risks.
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