When it comes to protecting your business and its leadership, two common types of insurance often come up: Management Liability and Directors & Officers (D&O) Liability Insurance. While they sound similar, they serve distinct purposes. Let’s break it down:
- Directors & Officers (D&O) Liability Insurance:
This is specifically designed to protect the personal assets of directors, officers, and key decision-makers. It covers claims made against them for alleged wrongful acts while managing the company, such as:
- Breaches of fiduciary duty
- Mismanagement
- Failure to comply with regulations
Essentially, D&O ensures that leaders can confidently make decisions without fearing personal financial ruin from lawsuits.
- Management Liability Insurance:
This is a broader package that often includes D&O cover but extends protection to the company itself and sometimes its employees. It typically covers:
- Employment practices liability (e.g., discrimination, wrongful termination claims)
- Fidelity (employee theft or fraud)
- Regulatory investigations
While D&O focuses on protecting individuals, management liability provides a more comprehensive safety net for the entire organisation.
- Which Do You Need?
The answer depends on your business structure, industry, and risks. Many companies benefit from the broader scope of management liability, but some may prioritise standalone D&O cover for senior leaders.
Have questions or need to review your current policies? Get in touch today!