As a director, officer, or member of the board or senior management team, you could be exposed to a range of legal claims. With significant responsibilities, you may also be liable for potential legal action.
What are the benefits of having management liability insurance?
Your Personal Assets May Be at Risk
As a director, your personal liability is unlimited, meaning someone can accuse you of committing a wrongful act. Such accusations can put your personal assets at risk, and even if you’re not guilty, legal defense costs can add up significantly.
Small or Large – You’re Still at Risk
Regardless of whether your business is small, medium, or large, legal action can be costly. You could still face charges for breach of contract, health and safety violations, or employment-related claims—even if you don’t have a board of directors.
Risks Can Come from Anywhere
Claims can arise from a variety of sources, including shareholders, investors, customers, clients, employees, and regulatory bodies.
You Could Be Held Responsible if the Business Fails
If your business is facing financial difficulties, you could be held personally liable for failing to act in the best interests of your creditors. However, management liability insurance can protect you against claims related to breaches of legal duty.
Have a Professional Indemnity Insurance Policy? It May Not Be Enough
A professional indemnity insurance policy covers the business itself but may not extend protection to directors and senior management personally. If an employee, customer, investor, or shareholder files a claim against you as an individual, a management liability insurance policy can provide the necessary coverage.
Cyber Attacks Are Also Covered
If a cyber attack occurs, you could be held personally responsible for any data leaks or breaches. As a director, you are responsible for ensuring that adequate systems and controls are in place to manage company and customer data securely.
In the event of a cyber attack, any affected party could file a claim against you.
To learn more about Management Liability Insurance, get in touch with our team for a no-obligation discussion or a free review of your current policy or upcoming renewal. Call us on 01536 303310 or complete our enquiry form and we’ll be in touch as soon as possible.