Business Insurance For Directors and Officers

Some of the main types of business insurance that offer protection to company directors, managers and senior officers are as follows: 

Management liability insurance 

Management liability insurance is the main type of insurance that will protect company directors against the following risks: 

1. Claims of statutory breaches of duty (for instance, breaches of OHSW legislation) 
2. Statutory fines and penalties imposed as a result of alleged breaches 
3. Defamation claims 
4. Sexual harassment claims 
5. Unfair dismissal claims 
6. Other charges resulting from OHS incidents or accidents 

Management insurance is highly customisable, so you can choose whichever type of insurance you feel is necessary to make up your business package. Cover is available for amounts ranging from $1 million to $5 million. Choose from: 

1. Directors and officers liability – protecting against losses due to claims of alleged wrongful acts in their capacity as a company director or officer. 
2. Corporate liability – protects the company itself against claims of alleged wrongful acts 
3. Employment practices liability – which covers the company from claims made by employees concerning working conditions or laws 
4. Statutory liability – which protects the company itself and senior management and employees from allegations of breaches of key legislation 
5. Crime – covers against direct financial loss as a result of theft or attempted theft from your business premises by either an employee or third party 
6. Tax audit – which covers any additional expenses necessary to comply with an ATO-ordered tax audit 
7. Superannuation trustees liability – which provides protection against any alleged act, error or omission arising due to a person’s status as a Superannuation Trustee 

What it covers: 

1. Legal and defence costs 
2. Investigation costs 
3. Fines and penalties 
4. Damages awarded 
5. Claimant costs awarded against the insured 

Professional indemnity insurance 

The greatest risks faced by directors and company officers often relate to legal liability. If you’re a working director or company officer who still offers a service or advice directly to clients in addition to running the company, you may also wish to consider professional indemnity insurance. 

This type of insurance covers you against claims the service you provided or advice you offered was negligent or fell short of expected professional standards. It’s a very important type of insurance to have in certain industries and is a compulsory part of membership for many professional associations. Cover is available starting from $250,000, but can extend up to $10 million or more. 

What it covers 

1. Cover for your legal defence costs 
2. Payment of compensation if there’s a successful claim against you 
3. Payment of court-awarded damages to the litigant 
4. Cover for the cost of disciplinary proceedings or investigations 

Personal accident and illness insurance  

Since you rely on your good health to continue running your company, taking care of your physical wellbeing should be a high priority. Accident and sickness insurance can provide cover for you if you become sick and are unable to work, providing a weekly replacement income if you’re injured or ill. 

What it covers: 

1. Loss of income as a result of an injury or illness 

Optional extras can include: 

1. Death benefits 
2. Disablement benefits 
3. Payment of business expenses during your recovery period