Commercial Insurance
Protection for directors, officers and managers
The decisions you make running a company carry their own risks. Management liability covers the company and its senior people against claims arising from those decisions.
What management liability risks are there?
Running a business means living with risk. Management liability is designed around four kinds:
- Strategic risk — decisions that turn out badly, from a merger to a product launch.
- Compliance risk — alleged breaches of regulation, from environment to employment law.
- Operational risk — failures in process, systems or people that cause loss.
- Reputational risk — damage to the standing of the company and its leaders.
Types of liability
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PI vs management liability
Clients frequently ask whether management liability is the same as professional indemnity. They're distinct products. Professional indemnity deals with financial loss a third party suffers from your professional advice. Management liability deals with third-party financial loss caused by mismanagement.
Unfair dismissal by the numbers
In 2024–25 the Fair Work Commission received 16,500 unfair dismissal applications — 37% of all lodgments — and ran over 13,800 unfair dismissal and general protections (dismissal) conciliations.
A closer look: unfair dismissal
Unfair dismissal is one of the most common claims brought against employers. Even a fair, transparent termination process can attract a claim — against your company, its directors, and you personally.
From our clients
“Our dealings with KeyInsure have always been very friendly and helpful, also very quick response and professional advice. Pretty sure they save us money on our insurances also. Thank you.”
KeylendWho needs this cover
Management liability is designed for private companies and their directors, officers and managers. The decisions made at the top carry personal exposure, and the company itself can be the target of claims.
- Private companies with employees
- Directors and officers of family-owned businesses
- Companies with contracts, leases and supplier agreements
- Businesses subject to workplace, safety or environmental regulation
- Not-for-profits and associations with a board
- Growing businesses adding staff and managers
What affects your premium
Management liability is priced on the company’s profile and how it is run.
Turnover and size
Annual revenue, number of staff and number of sites all feed into the premium.
Number of employees
Employment practices claims are among the most common triggers, so headcount matters.
Financial position
Insurers look at solvency and financial stability when assessing directors’ exposure.
Limit of cover
A higher limit costs more. Contracts and site requirements often set the minimum you need.
Claims history
Past claims — yours and, in some cases, the industry’s — affect what insurers offer.
Governance and HR practices
Written policies, contracts and procedures reduce the likelihood of a claim and help at renewal.
Common questions
What is the difference between management liability and D&O?
Directors and officers cover protects individuals. Management liability packages that together with cover for the company itself, employment practices, statutory fines where insurable, and often crime and tax audit costs. It is designed for private companies rather than listed ones.
Does it cover unfair dismissal claims?
Employment practices liability, which is usually part of a management liability policy, is designed to respond to claims such as unfair dismissal, discrimination and harassment, subject to the policy terms.
Are fines and penalties covered?
Some statutory fines and penalties can be covered where the law allows them to be insured. Penalties for deliberate wrongdoing are generally not insurable. Your policy wording sets out what applies.
My company is small — do I still need it?
Small companies are often more exposed, not less, because a single claim can be significant relative to the business. Employment-related claims in particular do not depend on company size.
Related cover
Ready when you are
General advice only. Consider the relevant PDS & TMD before acquiring any product.