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Personal Insurance for Directors, Officers and Managers: What You Need to Know
While a business purchases property damage, money and public liability, it is also important to ensure that a director or a manager’s personal liability related to running a company is also insured.
What does it cover
D&O or Management Liability insurance covers both the directors, officers and managers, as well as the company, against legal defence costs and any damages awarded by a court for actual or alleged acts, errors or omissions arising out of the operation or management of the company.
Key benefits
D&O or Management Liability protects directors, managers and senior staff against potentially significant personal legal costs, as well as damages awarded by a court.
These amounts can easily range from tens of thousands to hundreds of thousands of dollars, a significant financial burden.
The following covers are usually purchased as a package, with sums insured (and premiums) based on your own needs and risks:
What’s Usually Covered
- Management or Directors & Officers
- Company
- Occupational Health & Safety
- Employment Practices
- Crime against the company or from employees
- Statutory Liability
What’s usually not covered
- Shareholder actions against the management
- Insolvency
- Cyber-crime or cyber attacks
Professional Indemnity – it’s important to understand that Professional Indemnity insurance does not cover the same issues as D&O and Management Liability insurance. Professional Indemnity covers financial loss claimed by a third party as a result of actual or alleged negligent professional advice.
So, Management Liability covers internal losses to the business, whereas Professional Indemnity covers losses to external customers (third parties) of the business related to actual or alleged negligent professional advice.
Speaking to a professional insurance adviser
Given that no two businesses are alike and nor are their risks, your D&O or Management Liability insurance will need to be customised to meet your own personal and business risks. Insurance advisers are trained professionals who will talk with you to understand your needs and provide a number of insurance recommendations for you to consider.
If you want professional advice in managing your personal financial risks running your business, talk to an insurance professional today and find your local adviser.