Broker-arranged
Management liability insurance
Cover for the company, its directors and its managers against claims about how the business is run: directors’ duties, employment disputes, regulator investigations and theft by employees. A licensed broker arranges it.
- Built for private companies and their directors
- One short form, then a licensed broker takes it from there
What is management liability insurance?
business.gov.au describes management liability as insurance that covers directors, officers and managers for claims against their management practices. For a small private company it usually bundles several covers into one policy, protecting both the company and the people who run it.
What a management liability policy usually includes
Policies differ, so the PDS is the final word. These are the sections you’ll commonly see.
| Section | What it’s for |
|---|---|
| Directors and officers | Claims alleging a director or officer breached their duties. |
| Employment practices | Claims by employees such as unfair dismissal, discrimination or harassment. |
| Statutory liability | Defence costs for regulator investigations, and some fines and penalties where the law allows them to be insured. |
| Crime | Theft or fraud by employees, and some third-party fraud. |
| Tax audit | Professional fees for responding to a tax audit. |
Why directors look at it
Running a company comes with personal obligations. ASIC explains that directors have a positive duty to prevent insolvent trading, and that a creditor, ASIC or a liquidator can take legal action against a director for it.
The ATO can also recover some unpaid company amounts from directors personally under the director penalty regime, including PAYG withholding, GST and super guarantee charge. Insurance won’t pay a company’s tax debts, so check what a policy says about defence costs and investigations.
Management liability, PI and public liability: which is which
They’re often confused. Here’s the difference:
- Management liability.Claims about how the company is run, against the company and its directors and managers.
- Professional indemnity.Claims that your advice or professional service caused a client a loss. Professional indemnity
- Public liability.Injury to people and damage to their property. Public liability
How to get management liability through us
Management liability questions
What does management liability insurance cover?
Claims against the company and its directors, officers and managers about how the business is run. Policies commonly include directors and officers, employment practices, statutory liability and crime sections.
Do small companies need management liability?
It isn’t compulsory. It’s worth considering if directors want protection for their personal assets against claims about how the company is run, or if you employ staff.
Does management liability cover unpaid tax?
No. It won’t pay the company’s tax debts, including amounts the ATO recovers from directors under the director penalty regime. Check what it says about defence costs.
Is management liability the same as D&O insurance?
Directors and officers cover is usually one part of a management liability policy, which also covers the company and adds sections such as employment practices and crime.
Why is management liability arranged by a broker?
Sections, limits and exclusions vary a lot between insurers, so a licensed broker reviews the company and arranges suitable quotes rather than us quoting online.
Keep reading
More broker-arranged cover
Sources
Management liability