What are your Management Exposures in your business? Have you got the Management Liability Insurance that you need?
The law imposes duties upon the directors and officers of companies which they are personally liable for including:
- To exercise a reasonable degree of care and due diligence in the conduct of their duties and use of the power of their position
- Not make improper use of information or their position to gain advantage for themselves, or to disadvantage shareholders or the company
- Act honestly in all of their dealings
- Prevent the company from trading and continuing to incur liabilities whilst insolvent
A company and its directors face both personal and corporate liabilities from numerous stakeholders including the following:
- Shareholders
- Employees
- Competitors
- Creditors
- Regulators
- Customers Liquidators / Administrators
Even where a director or executive has acted at all times in an honest manner and with appropriate diligence in the performance of their duties, an allegation can be made which must be defended in court
Below is an example of Management Liability Case Study presented by AIG Australia based on a real claim that occurred in Australia:
Jane was a senior employee who believed that she had worked hard and contributed to the success of the business over a significant period of time. Yet when it came to her annual review, she has the impression that she was not offered the same opportunities that she would have received is she was a not a woman. Jane complained to her manager that she was being unfairly treated. Shortly after Jane was dismissed. Jane commenced employment proceeding against the company who ultimately settled the matter with a payment to Jane for an amount in excess of $80000 with legal costs exceeding $35 000.
Having a Management Liability Insurance Policy in place that has been specifically designed to provide cover for a broad range of management liabilities that you may be exposed to is essential in today litigious society.
Please give our office a call to find out if you currently have the cover needed to protect yourself, your company and your assets if a claim was made against you.