Management Liability Insurance is designed to protect your company, its directors, officers, and senior managers from claims made against them in connection with their decisions and actions while managing the business.

Keeping your business risk information up to date is essential to ensure your insurance cover remains adequate, your premium remains competitive, and your insurer fully understands and accepts your risk.

At DPI, we provide bespoke advice and service when arranging your insurance. If there’s anything you don’t understand or need help with, please don’t hesitate to contact us – we’re here to support you.

Below is a summary of the key areas we typically review at renewal for a Management Liability insurance policy and why they are important:

1. Company Structure and Activities

We’ll review your current company structure and business activities, including:

• Any changes to ownership, subsidiaries, or corporate structure
• Expansions into new industries or jurisdictions
• Mergers, acquisitions, or planned disposals

Changes in structure or operations can significantly affect risk exposure and should be disclosed to ensure full protection.

2. Directors, Officers, and Key Personnel

Management Liability Insurance covers individuals in leadership roles. At renewal, it’s important to:

• Notify us of any resignations, appointments, or disqualifications
• Highlight if any directors serve on external boards or act in a dual capacity

3. Corporate Legal Liability (Entity Cover)

This protects the company itself from claims, such as:

• Mismanagement allegations
• Breach of contract
• Breach of regulation or legislation (e.g. Companies Act, GDPR)

If your business has faced any litigation, investigations, or regulatory scrutiny in the past it’s essential this information is disclosed.

4. Employment Practices Liability (EPL)

If your policy includes EPL cover, we’ll review:

• Your HR procedures (most insurers require professional advice to be sought prior to redundancies and dismissals)
• Employment and grievance policies (most insurers require HR policies to be communicated in writing to all employees)

Strong employment practices can help reduce the likelihood of costly employment-related claims.

5. Financial Position

Insurers require up-to-date information about your company’s financial stability, including:

• Turnover/Fee Income in the last published set of accounts
• Whether the business has a positive balance sheet
• Whether the business made a profit in the last recorded accounts
• Details of any debt or insolvency concerns

Financial distress increases the risk of management-related claims and circumstances of this nature must be declared.

6. Claims and Investigations

We’ll ask whether any of the following have occurred over the past 12 months:

• Claims or allegations made against directors or the business
• Regulatory investigations or enforcement actions
• Employee disputes or wrongful termination claims
• Shareholder actions or whistleblower reports

All known claims or circumstances that may lead to a claim must be disclosed to maintain coverage.

7. Coverage Limits and Extensions

We’ll review your current:

• Limits of indemnity (e.g. £1M, £2M, etc.)
• Jurisdictional scope (UK only, EU, Worldwide excluding USA/Canada, or Worldwide including USA/Canada)

8. Insurance General Acceptance – Adverse Financial History, Health & Safety Breaches and Criminal History

Commercial insurance is subject to an ongoing fair presentation of risk and insurance contracts are subject to certain standard general acceptance criteria. It is the ongoing responsibility of the policyholder to ensure any adverse financial history, health & safety breaches and criminal history are disclosed as these are considered material facts that directly impact the insurer’s ability to accurately assess risk. Non-disclosure or misrepresentation of such information can lead to serious consequences, including the voiding of the policy, rejection of claims and legal action. Full disclosure ensures transparency, allows insurers to offer suitable terms and helps maintain the integrity of the insurance contract.

Please Note:
This guide is for general information and is not exhaustive and should not be construed as bespoke advice or a personal recommendation. Management Liability Insurance policies can vary depending on the size, structure and the activities of your business.