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Understanding Management Liability

Posted on: January 30, 2018 by Signature Insurance Group

Risk is a fundamental component in managing a business. Businesses and corporations of every size are vulnerable to lawsuits against the business, the executives or board members for a variety of reasons. “Management liability” is a term that is typically used to describe a combination of insurance policies that help to protect a business, as well as its directors and officers. This type of insurance package protects both the business and its employees in situations where a general insurance policy would not.

Basic management liability insurance is usually comprised of directors & officers (D&O) liability, employment practices liability (EPL), and fiduciary liability insurance, each providing different types of coverage and working together to meet a business’s unique needs.

Directors’ and Officers’ Liability (D&O)

D&O liability protects a company’s directors and officers from a financial loss resulting from litigation brought against them for an alleged wrongful act in their capacity as directors and officers. It protects the personal assets of the directors and officers as well as the assets of the business itself, and covers both public and private entities.

Many business owners do not fully understand the risks that directors and officers take on in their operations. Many seemingly innocuous business activities such as mergers & acquisitions, raising capital, sharing trade secrets and even relationships with creditors, regulators, competitors, or customers can create vulnerabilities for a company and its executives.

Employment Practices Liability (EPL)

EPL provides coverage for financial loss resulting from an actual or alleged “employment practices violation” by an employee, applicant or third party vendor. This coverage extends to all employees of the company including past, present, part time or full time, temporary or seasonal, volunteers or interns and applicants being considered for employment.

EPL coverage includes allegations of harassment, discrimination, employer retaliation, wrongful termination, defamation of character, failure to hire, civil rights violations, emotional distress, deprivation of career advancement, disparate treatment, hostile work environment and more.

Fiduciary Liability

Fiduciary liability is an often overlooked insurance product that protects a company’s benefit plans as well as the people who oversee them. It provides coverage for financial loss resulting from litigation against plan trustees and other administrators that oversee employee benefit plans, including those who contract with investment managers.

Management liability is fully customizable, and additional options can be added to the coverage based on a business’s needs. Signature Insurance agents develop a thorough knowledge of a company’s needs in order to provide recommendations for products that are tailored to their specific exposures and strengths.

About Signature Insurance Group

Signature Insurance Group has been working since 1969 to provide comprehensive insurance solutions to individuals and businesses across the United States. We offer a range of insurance products and services in risk management, employee benefits, business insurance, and personal insurance, and we pride ourselves on our commitment to creating “Signature Relationships” with our clients where we commit to providing the best, most comprehensive service possible. To learn more about our goods and services, contact us today at (800) 464-3606.

Posted in: blog Management Liability