Management Liability Insurance

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What Management Liability Insurance is All About:

Company leaders often need multiple forms of insurance to protect them from the risks that come with being a manager. Risks can include exposure involving governmental regulations, finances, employment practices, and benefits administration and distribution, among many others.

That’s where Management Liability Insurance comes in. It is not one type of insurance, but a combination of several insurance policies. These policies are purchased as a package to cover risks that are common for business managers and directors, as well as the business as a whole.

Read on to see if Management Liability Insurance offers the right coverage for your business.

What insurance types fall under Management Liability Insurance?

There are five main insurance policies which one might combine to create a Management Liability Insurance package:

  • Directors and Officers Insurance (D&O): This policy protects company officers and other decision makers within the business against claims made by shareholders, competing businesses or even government or state regulators
  • Employment Practices Liability Insurance (EPLI): This policy protects managers against complaints and lawsuits related to hiring, firing and promotion decisions
  • Fiduciary Liability Insurance: This insurance type provides protection for a company’s benefits plans as well as the employees who manage the plans
  • Crime Insurance: This type of insurance provides protection against crimes committed by employees that could directly affect the business
  • Special Crime Insurance: This type of insurance covers crimes related to kidnapping, ransom, and extortion made against employees and managers

Who needs it?

If your business needs more than one of the insurance policy types listed above, you may benefit from Management Liability Insurance.

A good example of a business that might need this type of insurance is the owner of a nonprofit. If you own a nonprofit organization, your business would benefit from a Management Liability Insurance policy. All nonprofit organizations have a board of directors, and most have concerns over where money is spent and how decisions are made.

Similarly, large, publicly traded companies have acting directorial boards and are also beholden to shareholders. Decisions made from the top levels are often under heightened scrutiny. A Management Liability Insurance policy would cover most of the liability concerns for the leadership of these companies.

Still not sure what you need?

Head on over to CoverWallet’s Insurance Checklist. There you’ll find a list of insurance types needed for your industry.

How much does it cost?

The cost of this insurance will depend on a number of factors, including which types of insurance you choose to combine to form the package. There is a distinct cost-saving benefit to purchasing multiple insurance policies under one packaged deal. Premium discounts can apply when 2 or more of the different policies are joined into a Management Liability Insurance policy.