When you’re running a startup, you probably don’t want to think about what might go wrong but, you have to be aware that even small to medium-sized enterprises need Management Liability insurance.

This protects you and your startup against the risks and exposures of running the business – basically your liability for mismanagement. It is designed to give SME startups essential cover across a broad range of exposures and protects your senior managers, particularly if you’re operating under a Limited Liability Partnership model.

A standard policy will usually include:

Directors’ and Officers’ Liability

This protects past, present and future directors and officers plus anyone else involved in the management your startup for claims arising from any actual or alleged act (such as an error or omission).

Outside Directorship Liability  

If your or your senior team members or partners are serving on boards of other businesses, typically not-for-profit organisations, they may need this cover. Generally it applies to not-for-profits or any other company in which the person insured owns 50% of the voting shares. You can specifically request other outside directors to be added to the policy.

Company Reimbursement       

Your startup can be reimbursed for payments it makes to indemnify directors or officers against claims relating to their actions.

Employment Practices Liability           

This covers your startup, directors, officers and employees for claims made by current, past and prospective employees for issues arising from a range of employment practices, such as harassment, breach of employment contract and defamation.

Crime/Fidelity

It’s not something you really want to think about happening, but it’s seriously important to have – this covers your startup against loss of company property caused by employee dishonesty or fraud.

Statutory Liability        

This covers certain individuals and the startup for fines and penalties that might arise from operating the business. Potential claimants can include the Limited Liability Partnership itself, third parties such as regulators (ASIC, APRA or the ACCC) and, in certain circumstances, the members themselves.

We can help you achieve the right Management Liability insurance for your startup.

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