Management liability insurance
.... now you're covered
What is management liability insurance?
Running a business carries personal exposure for its directors, officers and managers, not just the company itself. Claims can arise from actual or alleged breaches of the Corporations Act, employment disputes, regulatory action and more, and it isn't only large companies exposed — small and medium business owners carry this risk too.
That risk is growing — the Fair Work Commission's Annual Report 2024–25 recorded 16,500 unfair dismissal applications lodged over the year, part of a 10% rise in total lodgments on the year before.
Management liability insurance covers the cost of defending directors, officers, managers and the business itself against claims arising from the way the business is run, along with certain fines, penalties and settlements where insurable by law. Management liability insurance is designed to meet exactly this exposure, protecting the people who run the business as well as the business itself.
What's covered by management liability insurance
Management liability packages differ more between insurers than most business covers, and not every section applies to every business or policy. Your broker can confirm what applies to a specific policy and walk you through other benefits that can be added to your management liability cover.
Cover for directors and officers personally, for claims alleging a wrongful act in managing the business.
Cover for claims such as unfair dismissal, discrimination or workplace bullying and harassment.
Cover for defence costs, and certain fines and penalties where insurable by law, arising from a breach of legislation.
Cover for losses arising from employee theft, fraud or dishonesty.
Cover for claims made against the business itself, not just its individual directors and officers.
Cover for the costs of responding to a formal investigation by a regulator or government body.
Why you might need management liability insurance
Management liability policy types
Management liability is usually packaged as a single policy covering several sections, such as directors and officers liability, employment practices liability, statutory liability and crime, rather than bought as separate policies. Businesses can often choose which sections to include and at what limit, so cover can be shaped around the size of the business and the risks it's most exposed to.
Management liability key considerations
Policy wording varies significantly between insurers on this product, more than most, so it's worth checking exactly which sections and exclusions apply rather than assuming cover matches what a similar business holds. Fines and penalties are only insurable where the law allows it, and cover for things like tax audit costs is common but not universal. Reviewing the wording with your broker before a claim arises means there's time to close any gaps.
It's personal, even when it's business
Running a business means personal exposure for the people who run it, not just the business itself, and that exposure shows up in employment disputes, regulatory scrutiny and claims against the company just as often as anything more serious. Management liability insurance is designed to cover that overlap between the personal and the corporate, so a claim doesn't fall on a director's own assets or the business's cash flow.
Ask your broker which sections are included in your management liability cover, whether tax audit costs and crime cover are part of the package or need adding separately, and how the policy responds if a claim is made against a director after they've left the business.
Let's get you covered
