False confidence in your insurance protection can come at a high cost, and there’s no room for confusion with Management Liability.
It’s a fact of commercial life that claims and investigations are becoming increasingly common, and even winning a legal case can carry a very high price. Legal costs are only the beginning – there is also considerable time taken up, as well as potential damage to your reputation. Care and not-for-profit organisations are just as vulnerable to these situations as any other business. If the circumstances are right, the claims and investigation potential is there.
A Management Liability policy is there to protect Governors, Directors, Council members, Officers, Trustees and Employees, for negligent acts, errors or omissions in the operation of the company.
Additional coverage is also available in the form of Company/Charity Legal Liability to protect the company entity should allegations arise around health and safety, discrimination, mergers and acquisitions, and even corporate manslaughter to name a few.
Employment Practice Liability is an extension to a Management Liability policy, which protects the company for employment law and HR related claims. Legal expenses cover is always useful, but will only go so far in larger protracted actions – not nearly far enough on most occasions. In addition to lower limits of indemnity, legal cover often only responds to cases where there’s a good chance of success.
There are policies available which help reduce your chances of having to make a claim in the first place, with pro-active legal support and guidance included within certain Management Liability packages.
Essentially, all it takes is for an allegation to be made for regulators to step in and launch an investigation. This is what makes Management Liability so crucially important, as it is providing protection to you as an individual as well as your company.
Below are three scenarios where a Management Liability policy has offered support:
1. Unfair Dismissal:
A teacher at a special needs charity was made redundant and made a claim against her former employer for unfair dismissal. She asserted that she was made redundant only because she had highlighted poor Health & Safety practices.
The legal fees in defending the claim were £17,000.
2. Professional Negligence:
A community help charity faced a claim after a children’s park which they had built was found to be defective as it had been built on a slope. This led to a build-up of water meaning the park had to be re-built. Although the charity had used the services of a surveyor in the design, they were held responsible for the error.
As well as receiving a £25,000 bill to correct the error, the charity had to pay legal fees of £5,000.
3. Death of Patient at Care Home:
After the suicide of a patient on an accompanied day trip, a residential care home faced an investigation involving the police and the Health & Safety Executive.
The legal fees to represent the charity were £25,000.
If you can imagine any of these types of claims causing issues for you and your organisation, a Management Liability Policy can give you confidence in the face of an unpredictable future. Get in touch with the team at McClarrons who will be more than happy to discuss your requirements.
