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Management liability involves several types of insurance that protect your business’s day-to-day operations. By covering this area of your business, you’re protecting everything from key company leaders and employee benefits to your method of hiring and dismissing workers.
Management liability insurance is a broad term for insurance that protects companies from the hazards of running a business. It also protects key leaders from harm related to mismanaging the business.
Management liability insurance includes coverage for board leaders and employer practices. Some people use the terms management liability and directors and officers liability interchangeably.
Multiple types of business insurance can safeguard your business’s management liability:
Management liability insurance pays expenses for your business’s legal defense in court for covered claims, including court and lawyer fees. It can also pay for court settlements to the person suing you if the judge deems your company responsible.
Most midsize companies can expect to pay between $5,000 to $10,000 for most types of management liability policies like DO insurance. However, small companies might pay a few thousand dollars or less since they encounter fewer risks during daily operations.
When Krueger Media expanded its business and employees, the company bought directors and officers liability insurance. The midsized company paid $5,000 per year for the policy. When a client filed a complaint against the company’s CEO, Krueger Media’s insurance paid $250,000 to settle the court case.
Management liability coverage protects company leaders and employees involved in managing the company. That may include:
Your company could face a variety of claims for not meeting legal standards or performing required responsibilities. Examples include:
Most management liability policies exclude situations that involve:
Your company faces many challenges to run daily operations, including promoting new employees and managing growth. And sometimes those challenges lead to claims that you’ve mismanaged in some way. To keep your business running and protect it during possible claims, find the right business insurance for your company.
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A 30-year veteran of the credit industry, Stevens is a leading analyst, commercial banker, senior credit officer, nationwide trainer and consultant.
