Today’s business environment is as unpredictable as the weather. Corporate empires can take years to build but can be brought down in mere minutes. If you want to protect all the hard work you’ve put into establishing and managing your company, you have to make sure that your business is protected against the unexpected.
An alarming number of businesses from all kinds of industries forego one of the most crucial components of an insurance program, management liability insurance. Every year, millions of dollars are spent on claims when the interests of a company’s management and staff come into conflict. Such losses could have been prevented by simply including management liability insurance with the company’s other risk programs.
Management liability insurance covers you against operational risks. The spotlight shifts on your conduct as a manager and as a company whenever there is an alleged breach of company regulations. To protect certain individuals and the company, management liability insurance should be in place for all claims related to exposures in managing a business.
Exposure to Manager’s Liability
How would you know if you have exposure to management risks? The basics are that if you have employees, competitors, customers, and clients, you need management liability insurance. Other liable conditions include dealings with third parties, incorporated entities, and incurred debts.
Claims from Various Entities
Your company may suddenly be beleaguered by a former employee’s claims for wrongful dismissal. A competitor might bring allegations of conduct involving anti-competitive behavior. Statutory bodies such as the Australian Securities and Investments Commission, shareholders, and even the Corporation itself can expose directors and officers to claims.
Protect Yourself and the Company
Your company can opt to shoulder legal costs for a claim and still leave you with hefty expenses, as not all liabilities incurred by a director or officer can be lawfully indemnified by the company under the Corporations Act 2001 s. 1317H. If you are covered by Management Liability insurance, the policy may afford cover that the company is not able to provide.
You will still be burdened with the time and money needed to defend yourself from manager’s liability issues, even if a claim brought against you is truly without foundation; it will incur legal expenses. Rather than having to tap into your personal or the company’s resources, get management liability insurance in Sunshine Coast. Some insurance brokers, such as Insure theProduct, have relevant business insurance programs that can be customised to suit your needs.
(Source: Australia: Management Liability Insurance: The evolution of a revolution, mondaq.com)