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Whilst Management Liability Insurance and Employer's Liability Insurance both cover the people in a business, they actually serve different purposes.

Understanding what Employer’s Liability insurance offers versus Management Liability insurance can help determine whether both, one or neither are required for an individual business. 

What Is Employer’s Liability Insurance?
Employer’s liability insurance is a legal requirement for most businesses as it covers the costs associated with employee claims for workplace injuries or illnesses. For example, if an employee gets hurt whilst at work through your negligence (or alleged negligence), an Employer’s Liability Insurance policy can cover medical costs, legal fees and any compensation. And for any employer, operating without employer’s liability insurance could result in severe legal penalties.

What Is Management Liability Insurance?
Management Liability insurance (sometimes called Directors & Officers Insurance) is designed to protect the corporate and personal assets of directors and officers. It covers claims related to mismanagement, such as breaches of duty, wrongful termination, discrimination or failure to comply with regulations. 

Without Management Liability insurance, directors and officers may be held personally liable for claims, putting their personal assets at risk. Following changes brought in by successive Governments shareholders, customers, suppliers, the Government, employees, creditors and auditors (amongst others) have the power to sue a named director rather than the business itself.

So, will we need both Employers Liability and Management Liability for our business? 

Depending on your business, it might be sensible to have both types of insurance. That way, you are meeting your legal obligations to employees and protecting you from claims stemming from workplace incidents, whilst also safeguarding your leadership team from a broader range of risks that could arise from managing the business.

Both policies address unique risks, and together they provide comprehensive coverage to help make sure your business, leadership team and employees are well-protected. 

To see which insurance policies might be prudent for your business, just give Prizm Solutions a call. We’ll help you understand what insurances are a priority, then tailor cover to your specific needs. That way, you have peace of mind that you and your business are covered should anything unexpected occur.