Small and medium businesses make up 99.9% of all private sector businesses in the UK. They drive economic growth, open new markets and provide jobs to millions across the country.
The protection of these organisations is therefore vital; insufficient insurance can lead to businesses collapsing altogether should a claim arise. From buildings insurance for your premises, business interruption insurance to protect against unforeseen losses due to disruption, and public and employer’s liability policies, it is important that you consider the risks your business faces both internally and externally.
One of the most valuable policies we offer to SMEs is Management Liability.
What is Management Liability?
Management Liability generally includes Directors & Officers Liability (D&O) and Employment Practices Liability (EPL). Different Management Liability policies can include various elements, such as kidnap and ransom, cyber liability and/or crisis response.
Here, we explain the most common elements – Directors & Officers Liability and Employment Practices Liability.
Directors & Officers Liability can protect you from claims emanating from inside or outside the company. For example, outside parties could bring a claim against you for a breach of duty, misrepresentation or contractual issues. External parties can be competitors, customers, regulators (such as HSE) and vendors. Inside parties could include investors, shareholders and employees.
Employment Practices Liability involves employer/employee relationships and claims could include (but are by no means limited to); discrimination, inequality, failure to promote and unfair dismissal.
The above examples are not an extensive list, claims can arise from a whole host of different scenarios and unfortunately, even if you know you have done nothing wrong, you must defend yourself against an allegation made against you or your business.
Why should you consider Management Liability insurance?
Rather than protecting the business as a whole, your MLP will protect individuals who have management responsibility in the business; it covers them for any claims made against them personally (for which penalties can be significant), including fines, disqualification or even a prison sentence. Management Liability will cover legal and compensation costs, defending you in the event of a claim being made.
In today’s increasingly litigious society, it is perhaps more likely than you might think that someone will make a claim against you. With a Management Liability policy in place, you can have peace of mind that your personal assets, as well as your business’, will be protected should the worst happen. The legal costs to defend allegations of wrongful acts alone can be financially crippling for both organisations and individuals.
What next?
If you would like more information about Management Liability cover or would like to discuss your commercial insurance more broadly, contact our commercial team today at commercial@networkportfolio.co.uk/mcclarroninsurance.com. Alternatively, to see what else we can help you with, click here.
* https://www.fsb.org.uk/media-centre/small-business-statistics
