Although each business is unique, there are universal liability risks that all businesses face. You should consider insurance coverage that will protect you from liability that is present in everyday business operations.
Larger businesses face a bigger variety of risks. In general, they are more likely to incur a claim and face more frequent insurance claims. Because of this, larger companies are better covered by having a larger variety of insurance policies to cover those risks.
Smaller organizations face similar risks on a reduced scale, so a combination of insurance policies may be a better option. Most insurance companies have developed special combination policies to address the unique needs of management teams in small- to medium-sized businesses.
Management Liability is a hybrid policy that combines several coverages essential to standard business operations that are normally sold individually. Policies commonly include:
- Directors and Officers Liability: Covers losses caused by a director or officer’s alleged mismanagement or improper conduct.
- Employment Practices Liability: Covers losses resulting from employment practices disputes, such as claims filed for discrimination, sexual harassment and wrongful termination.
- Fiduciary Liability: Covers losses resulting from mismanagement of employee benefit and pension plans.
- Professional Liability (also Errors and Omissions): Covers losses resulting from negligent acts, omissions or errors.
- Crime Insurance: Covers losses resulting from employee or outsider criminal activity such as theft, fraud, forgery and employee dishonesty.
Benefits of a Combined Policy
Management Liability policies can offer a level of protection not available through individual coverages. The combined nature of the policies allow for fewer gaps and broader coverage definitions. Because smaller organizations statistically have fewer of these types of claims, it may also come at a reduced cost when compared with buying all of the included coverages individually. While the exposures will always be there, smaller businesses are unlikely to need every form of coverage every year. Combined policies share coverage between exposures to reduce premium costs.
Coverage Comparison is Essential
There is no single standard policy for management liability insurance, so you have to compare policies to make sure the one you choose has the right coverage for you. ERM Insurance Brokers has the resources and expertise to analyze your unique needs to help you choose the policy that best fits your business. Don’t just think you have the right coverage. Contact us today to be sure you’re operating with the protection you need.
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