This company have really been supportive over the years when I needed the advice most at claims. Jade has been great to deal with on our renewal and offered great advice right throughout the process. This renewal was made easy with her diligence on each and every section of the insurance policy with a myriad of changes to this year's policy. Thankyou Jade - Highly recommended.
Management liability insurance for your business and its directors.
Quick answerWhat does management liability cover, and could my business package already include it?Management liability covers claims over directors' decisions, employment disputes and regulatory investigations. It can also include employee theft. A business package may include some limited cover. Consolidated Insurance Brokers checks what you need, what you already hold and what each option leaves out.
A dispute with an employee can become a legal bill for the business. A claim against a director can put personal finances at risk. We help you compare cover and cost, including what you could still have to pay yourself.
Google reviews, word for word
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We had excellent service in obtaining insurance on a newly purchased commercial property. Clayton Rowlings explained everything so clearly and very patient with many questions regarding different options. Highly recommended! Thanks Clayton.
Tracey helped me sort out professional indemnity and public liability insurance for my new business - she was super helpful throughout the process helping me navigate for the first time.
Deja provided a prompt and professional service in securing a policy that suited my requirements.
Terrific experience with Gina. I had a difficult policy which other brokers couldn't find a solution for. Gina had an option for me within a few hours. I would highly recommend.
Thank you so much Cyndie for your help/advice/service. You made the whole process so easy. Thank you again. Jason Armstrong
Alison was a life-saver for us, staying after hours to make sure that we could get the building insurance coverage we urgently needed for a property purchase.
Debbie was always happy to help with my questions and very prompt with her service.
Hi I can highly recommend Aimee Spencer for all your insurance needs she has done a fantastic effort on keeping my insurance policy once again Many Thanks for all your work
Saskia Van Oostveen was efficient, professional, accurate, helpful and friendly throughout the entire process. Highly recommend!
A great experience with Tori, attaining some tricky commercial insurance, she was very professional in catering to your needs, whilst also having a quick turn around.
Jade was wonderful, finding me insurance coverage for a commercial property. Greatly appreciated her excellent service.
I contacted Tracey E from Consolidated Insurance Brokers for some commercial property quotes. Tracey was super helpful helpful, friendly and provided great advice. Highly recommend for all your insurance needs!
Thanks for your assistance Dylan with car insurance inquiry you have been really helpful and professional.
Shona was always available and answered all my queriers. A1 service and happy to recommend.
I contacted Renay after she was recommended by a family friend, for home and contents insurance. She was prompt and helpful and had me all sorted in a couple of days. Highly recommend!
I needed fast transit insurance this week and Daniel Roussounis was outstanding in his immediate response and getting this organized for me. Can't recommend Daniel and Consolidated Insurance Brokers highly enough!
Second year organising insurance with Jim K., did not have any issues and a smooth transition. I recommend
May Lewong at the Emerald office was amazing. Easy to deal with and was quick and efficient.
Reena was absolutely fantastic during the entire process helping me set you our new home and contents insurance. Would definitely recommend to anyone.
Natasha as always, gives us professional, exceptional service and would recommend her to any business :-)
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Written by William Paull, QPIB
Co-Founder & Account Director · Read William’s full profile
What does management liability cover you for?
Management liability insurance is one policy built from separate covers. On the wordings we place, five are included by default: directors and officers, corporate liability, employment practices, statutory liability, and crime. It insures both sides, you personally when a claim names you as a director, and the company itself when the claim is brought against the business, usually as its own section with its own limit. It does not make every consequence insurable. A work health and safety penalty cannot lawfully be insured in most of Australia, and each section carries its own limits and exclusions.
What each section covers, where it is included:
- A staff dispute. Employment practices covers dismissal, harassment and discrimination claims, including from staff who have already left.
- A regulator's questions. Statutory liability helps the business pay to defend itself.
- Your decisions as a director questioned. Directors and officers (D&O) cover responds to an allegation that you breached your duties.
- Blame landing on the company. Corporate liability covers the company itself when a claim is brought against it over how the business is managed.
- Money taken by staff. Crime covers theft or embezzlement by your own employees.
What is D&O insurance, and how is it different from management liability?
D&O, short for directors and officers insurance, is the part of the cover that protects you as a person. Management liability is the wider policy, and it generally includes D&O alongside the sections that protect the business itself.
D&O responds to a claim made against you as an individual. On the policies we place most often, it can pay a director's defence costs as the case runs, with the insurer's consent. It also reaches your legal costs when a regulator's investigation starts during the policy. A claim brought by a shareholder with a large stake in the company is excluded on most of them. A dispute between the main owners of a family company can then fall outside it.
If the company is short of money, a liquidator can also pursue a director over a decision that went wrong. On some wordings, a claim connected with the company's insolvency can be excluded. That changes which wording fits a company with thin cash.
Standalone D&O is generally bought by a larger company, such as a listed or heavily regulated one, that has outgrown what a management liability policy is built for.
Doesn't my business pack or public liability already cover this?
Usually only part of it. A business package may include a few of these covers, but management liability usually needs its own policy. Public liability and professional indemnity respond to different claims, and a pack normally does not cover a claim against you personally.
Public liability responds when someone is hurt or their property is damaged. Professional indemnity responds to advice or a service you gave a client. Neither one covers a former employee's unfair dismissal claim.
Your company structure does not fill the gap either. A Pty Ltd or a trust puts a wall between the business's debts and your own pocket. It does nothing to stop a former employee or a liquidator coming after you in your own right.
What a pack does cover, and how it is put together, is on our business insurance page.
Is it worth it for a one-director company, or a sole trader?
Yes. Running a small company does not remove your responsibilities as a director. A claim can name you personally as well as the company.
In our experience the director most at risk of a claim is the one running a one-director company, and almost never because they did something reckless. They know how to run their business, and it is rare for anyone to be taught what the law asks of the person who signed on as its director.
If you trade as a sole trader, we can arrange management liability for you too.
What happens if a former employee takes you to Fair Work?
That claim sits in the employment practices section of the policy. Where you hold it, it can pay the legal costs of defending a former employee's claim above your excess, within the limit we set for that section with you.
If a former employee ever raises a dispute or makes a claim, tell your broker straight away. Under the policy, the day you report it matters, as well as the day the claim is made.
Does every section get the full limit?
The aggregate is your limit, usually the most the policy pays across all claims in the policy period. A $1 million aggregate does not necessarily provide $1 million for every section. On some cheaper wordings, crime, employment practices and statutory liability can each have $250,000 sub-limits, while D&O and corporate liability have access to the headline limit, subject to the wording and aggregate.
Clients get caught on the lower section limits, on statutory liability and crime in particular. Say a staff member takes $400,000 and your crime section has a $250,000 sub-limit. The policy pays up to $250,000. The rest, at least $150,000, is yours.
Who pays to defend the business when a regulator comes after it?
When a regulator investigates the business, statutory liability can help pay to defend it, if you hold that section. That can include the cost of a work health and safety investigation or defence.
Across most of Australia the law bans insuring a work health and safety fine, and we do not arrange cover to pay one. The ban is aimed at the penalty and does not reach the cost of defending one, and what your policy pays comes down to its wording.
Our guide can insurance pay a WHS fine? covers where a work health and safety matter leaves you personally.
What if someone on staff takes money from the business?
Whether a theft claim is paid can turn on who took the money and how the payment was approved.
On some of the policies we place, an outside bookkeeper or accountant can be excluded from crime. On some, any payment over $1,000 needs a second person to authorise it, or a theft through that payment is not covered. Does someone outside the business keep your books? Can one person approve a big payment alone? Those answers decide which wording fits you. Crime has covers of its own to pick from, and we set its limit with you when we negotiate the policy's sums insured.
When your staff pay a fake invoice, some of the wordings we place exclude it outright. On others, cover turns on conditions such as a second sign-off and a phone call to check the bank details. Cyber needs a policy of its own. Even there the scam-payment section can be missing or capped: see cyber insurance.
Renewing, or thinking of switching insurer?
Management liability is written on a claims-made basis. It covers claims made while the policy is in force. Where a policy has one, its retroactive date decides how far back it reaches. Switching insurer can reset that date. Claims about how you ran the business can arrive years after the event, so that date can matter more than the price.
Before you switch insurer, we check how far back the new policy reaches against your old one, unless it carries an unlimited retroactive date. That way you know whether a cheaper premium would open a gap in your cover.
If your broker has gone quiet, you do not have to wait for the renewal. You can appoint us to look after a suitable policy you already hold, part way through its term and without cancelling it. We review it then, or at renewal. A claim already open with your current broker or the insurer stays with them. Anything new comes to us.
When there is a claim
On a policy we look after, you do not run the claim alone. A specialist claims manager on our team takes it up with the insurer. Your broker stays involved.
The claims manager follows the claim through and challenges a decision where the policy and the evidence support a different outcome. Your broker, who knows how your business runs, keeps an eye on it. That means less chasing for you while you keep the business running. The insurer makes the decision on the claim. We tell you what is happening as it moves.
Short answers
Does management liability include tax audit cover?
Yes, on some of the management liability policies Consolidated Insurance Brokers arranges, as a bundled amount or a section you can choose. It pays your accountant's, tax agent's or BAS agent's fees for responding to an ATO or state revenue review. The tax itself, any penalty or fine, and interest stay yours. It has to be in force before the audit notice arrives. Some tax audit cover also extends to an audit of a self-managed super fund.
What happens to my cover if I sell the business, close it or retire?
Some policies let a claim be reported after the policy ends, on conditions, through a discovery period, sometimes called run-off. On some wordings a short period runs automatically and a longer one can be bought. Selling the business, closing it and cancelling the policy can each be treated differently, so check what applies before you change or cancel cover. The policies Consolidated Insurance Brokers places most often let a director who retires keep cover for decisions made before leaving, for at least seven years. That cover starts once the company's policy ends. On some wordings it does not apply if another D&O policy replaces it.
What is the difference between management liability and professional indemnity insurance?
Professional indemnity covers claims from advice or a professional service you gave a client. Management liability covers claims from how you run the business itself: director decisions, staff disputes, regulators' investigations and theft from inside. Consulting and advisory businesses often hold both. See professional indemnity insurance for the advice side.
Could a claim against the business end up with your name on it?
Ring 07 3292 1111 and talk to a broker. We ask how your business runs and what cover you hold, if any, then tell you which claims management liability answers for a business your size.