Management Liability Insurance Coverage Basics

Management Liability Insurance Coverage Basics

Management Liability Insurance Coverage is designed as a  safeguard from universal exposures that all businesses face. In addition to insuring your specific liabilities, you need to consider management liability coverages that will protect you from common exposures generated by everyday business decisions. For larger organizations, the diversity of management liability exposures combined with the increased probability of higher claim frequency and severity means the use of a variety of management liability insurance policies is often an effective risk management strategy. However, for smaller organizations that face similar risks on a reduced scale, a combination of such Management Liability insurance policies may be a good risk management option as well as the financial impact of claim can be more severe.

Management liability insurance is often structured as a package policy that combines several coverages essential to standard business operations that are normally sold individually. Policies commonly include:

Directors and Officers Liability: Covers losses caused by a director or officer’s alleged mismanagement or improper conduct.

Employment Practices Liability: Covers losses resulting from employment practices disputes.

Fiduciary Liability: Covers losses resulting from mismanagement of employee benefit and pension plans.

Crime Insurance: Covers losses resulting from employee or outsider criminal activity such as theft, fraud, dishonesty, disappearance and destruction and employee dishonesty.

Combined  Management Liability Insurance Policy

Management Liability Insurance policies can offer a level of protection not available through individual coverages. The combined nature of the policies allows for fewer gaps and a more cohesive claims response should multiple management liability insurance coverages be triggered by a claim. Because of the efficiency associated with buying just one rather than many management liability insurance policies,  management liability insurance bought for multiple coverages may also come at a reduced cost when compared with buying all of the coverages individually. Often management liability insurance limits policies can be structure to share coverage to reduce premium costs.

Management Liability Insurance Coverage Audit

There is no single standard policy for management liability insurance, making sure your management liability insurance is structured to meet your unique business and personal needs is essential.

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