“Good judgement comes from experience, and a lot of that comes from bad judgement.” – Will Rogers
If you own a business, chances are you’re at least somewhat familiar with General Liability, and its first cousin Excess Liability, but if I did a full review of your business insurance would I see any Management Liability Coverage?
Management Liability? Why do I need that?
Management Liability includes coverage for Directors and Officers of the Company, as well as Employment Practices Liability, and a few other options.
The best way to illustrate why you need Management Liability is to remind you of some of the losses not covered under General Liability coverage.
Your General Liability does not cover:
- Acts taken by the board of directors, or any of its members, that someone else views as hurtful or harmful. Alleged mishandling of funds is a very common cause for lawsuits that would not be covered under your general liability. Remember that even if the lawsuit is baseless, hiring legal defense just to fight the case could cost you thousands of dollars – usually more than the cost of coverage itself.
- Allegations of discrimination or harassment brought by an employee or a volunteer against either a member of the board or the organization as a whole. That honor goes to Employment Practices Liability, which can also cover allegations from 3rd party vendors like the UPS guy or your IT contractor.
- Do you provide your workers with a 401k or 403b? Your General Liability doesn’t cover any alleged misconduct regarding the handling of these funds but Fiduciary Liability does!
Commercial Crime insurance covering Employee Dishonesty can also be a great asset to your company. How often do you check your financials? It can be written to include coverage for things like Computer Fraud and Social Engineering Fraud (when a hacker tricks one of your employees), that are unfortunately becoming more and more common.
“Hold on! I don’t run some big corporation here; I own a pizza shop! I don’t need this!”
You don’t need ALL of it, but you definitely need some – and you might not need to take out a separate policy! Employment Practices coverage and many Commercial Crime coverages can usually be added to a Business Owner Policy or even a Commercial Package, often for a lot less than you might expect.
In recent months we’ve seen increasing numbers of lawsuits filed against small businesses, and even non-profits. Give your current coverage a quick review and if you don’t have any of these please call or email us as soon as possible to discuss it with you.
We’re here to work with you to get your organization properly protected in a way that fits your budget.