In an increasingly litigious and complex world, it is more important than ever for companies to protect their financial stability, while individual directors and senior managers avoid or survive lawsuits. Without adequate cover, you not only risk losing your business, or job, but your personal assets, too. Think it “would never happen to me” or “only in America”. Think again. Daily headlines across Australia reveal an unending string of legal claims involving harassment, discrimination, wrongful termination, even fraud and embezzlement.
Supervisors at every workplace are especially liable and vulnerable to all types of lawsuits. And, as the number of legal claims increase, the costs of settlements seem to be on a steady rise. Defence and investigation costs alone can be financially crippling for businesses and individuals.
Consider this…
Embezzlement by a trusted friend
He was a trusted friend and employee but over a 5 year period this loyal, efficient accountant misappropriated $850,000 by altering cheques received from debtors.
Due to this trusting relationship the theft remained undetected for a long period of time by facilitating the fraud by continuing a cycle of paying debtors accounts from other debtors.
This continued until the scheme was uncovered by the company’s newly appointed auditors.
Total loss to the company amounted to $850,000.
There was no chance of recovery from the fraudster as he had no assets and had gambled away the stolen funds.
The investigation and legal costs totaled $150,000.
Management Liability Insurance is the single best way to manage these types of risks for you and your company. It can prevent a legal suit or statutory claim from turning into a financial disaster. Put simply, Management Liability means covering your backside. Think about it.
Management Liability Insurance coverage extends far beyond what typical policies provide. These are the key insuring sections of the policy that can protect you and your company.
Employment Practices Cover
Covers directors, the company and the employees for issues arising from employment practices, harassment, unfair dismissal and other employment issues.
Statutory Cover
Protects directors and the company for fines and penalties from operating the business including Workers Compensation related fines.
Crime Cover
Covers the company for fraud and theft by employees including theft of stock.
Corporate Entity Cover
Shields the company against actions arising from managerial matters.
Directors and Officers
Provides cover for you and your personal assets for actions undertaken in your role as a director of officer.
Superannuation Trustees Cover
Protects the trustees of any staff super funds run by the company for employees.
It is important to note that in regards to claims, the Management Liability Policy provides cover for defence costs, which can often run into hundreds of thousands of dollars.
In many circumstances management believe they will never suffer a loss.
Allegations regarding any of the matters detailed above will need to be investigated and defended, and a Management Liability Policy can provide great comfort with indemnity for these associated costs.
In addition to this base cover there are many extensions that can be included to cover any specific requirements of your business.
Think about it.
Management Liability Insurance
doesn’t just protect your business,
it protects your backside. And that’s the bottom line!
