Management liability unpacked

Our new Management Liability package comprises four distinct types of cover. In this short guide, we unpack their value to your client.

D&O

Directors, managers and employees are subject to various duties and standards in their day to day roles. If an individual fails to meet these standards they can be held personally liable via civil, criminal or regulatory proceedings. A D&O policy protects individuals for wrongful acts, covering the cost of defending these allegations and reimbursing associated awards.

With D&O claims increasing four fold in the past 10 years, it is becoming essential for directors, managers and employees to be protected by D&O insurance.

For example: A manufacturer employed a waste disposal contractor to dispose of old oil. Contrary to the manufacturer’s expectations, the contractor dumped the oil in a field and then became untraceable. The Environment Agency brought criminal proceedings against the manufacturer’s directors and considerable defence costs were incurred to achieve their acquittal.

What part of Pen’s policy would cover these costs? Pollution cover

Corporate Liability

Corporate liability provides cover for the business (“the corporate entity”) against claims brought about by the acts of its employees.

For example: Four teenagers drowned after a disastrous canoe trip. Criminal proceedings for corporate manslaughter were brought against the manager of the company that organised the trip and a separate action was brought against the company.

What part of Pen’s policy would cover these costs? Corporate Manslaughter (Defence costs)

Employee Practices

This provides cover for claims brought by employees for wrongful acts in the employment process eg wrongful termination, discrimination and sexual harassment.

For example: A team of female employees brought an action against their employer over claims that they were being paid less than their equivalent male colleagues. Their action was successful and the court awarded them compensation of £10,000 each.

What part of Pen’s policy would cover these costs? Employment Practice Liability

Fidelity cover

Protection of up to £2M for businesses against fraudulent acts committed by employees

For example: An employee working in a retailer’s finance department confessed to issuing unauthorised cheques from company accounts into his personal bank account over a period of five years.

What part of Pen’s policy would cover this loss? Crime cover