There are a number of misconceptions we come across when it comes to Management Liability policies; here, we explain the reality and explore some of the additional benefits a Management Liability policy can bring.
- We already outsource our HR so don’t need any assistance with employee matters
You may choose to outsource your HR, but this does not mean you are absolved or excused from liability relating to employee issues. Whilst an HR company may help you to pull together an employee handbook and assist with writing policies for your business, they are unlikely to be able to identify issues that are brewing within your organisation itself – they are not working within your company itself and are therefore not aware of all the ins and outs, or the individuals within it. We often hear of commercial businesses spending thousands on one-off case employment solicitors or contracted consultants, which, whilst helpful, isn’t going to stop a claim from being brought against you. A proactive Management Liability Policy will provide access to legal professionals to help you with the finer details and deal with any claims made against you.
- We’re a private company so we don’t really need a Management Liability policy
Private companies will have Employers and Public Liability policies in place, but their cover only goes so far as protecting the company itself, and shareholders only in respect of their investments within that company. This means that directors, officers and managers of a business are still exposed and, should the company not wish to, or be unable to, protect an individual, that individual will have to support and pay for their own defence. This means that directors, officers and managers of the company can end up with their own finances, homes and possessions on the line should be a claim be brought against them personally.
With Management Liability, the policy protects not only the company itself but the directors and officers of it, helping to safeguard their personal assets should a claim be brought against the company.
- It’s too expensive for the risk we face
Management Liability policies have become an important feature for most businesses, and they may not cost as much as you think. We believe that the premiums for these policies are a relatively small price to pay noting the regularity and cost of the claims we see being made. The average costs of a claim currently sit around £10,000.
In 2019, the Ministry of Justice (Tribunal Statistics Quarterly, April to June 2019) reported on the average employment tribunal awards; the below were amongst these numbers:
*Unfair dismissal = £13,704
Race Discrimination jurisdictions = £12,487
Sex Discrimination jurisdictions = £8.774
Disability Discrimination Jurisdictions = £28,371
Religious Discrimination jurisdictions = £4,767
Age Discrimination = £26,148
Given the average cost of such settlements, the premiums of Management Liability policies are a small price to pay and, we believe, extremely valuable to businesses and their directors, officers and managers. And of course, it’s not just employment tribunals an MLP will assist with – contractual disputes, health and safety disputes and an expanse of other claims can come about in running a business as a result of a wrongful act by a director or officer.
If you’d like an indicative quotation for your business, please do not hesitate to contact our Commercial Team on 01653 609151 or by emailing commercial@mcclarroninsurance.com.
- Our business is too small to warrant a Management Liability policy
It doesn’t matter how big your business is, any director or officer can have an allegation of wrongdoing made against them and have to defend themselves and/or their company. It may not be that the case ever reaches a courtroom but an investigation or some kind of defence may be necessary. This can get very costly very quickly and puts significant financial pressure on an individual if the company is unable to assist (financially) or is unwilling to, in the event a Directors & Officers or Management Liability policy isn’t in place.
Additional Benefits of a Management Liability policy
At McClarrons, we often recommend AXA’s Management Liability Policy to clients. This is because this policy comes with the benefits of law firm, rradar. You can read about just some of the incidents rradar have assisted MLP clients with here.
We recommend this policy, where appropriate, because it gives you value on day one. Often, the true test of an insurance policy, and its value, is seen when you make a claim – not here. With access to rradar through AXA’s MLP, you benefit from rradar’s:
- Legal advice line – a phone and email service available for you to get expert advice and support across a wide range of legal sectors. By using this proactive legal advice line, you can address matters in your business that could, if left, lead to a claim being made against you or your business. This line helps to reduce the amount of claims brought against policyholders, can help you communicate and consult with staff effectively, help you avoid costly court cases and employment tribunals and helps to improve your risk management as a business.
- Out of hours crisis line (available 24/365) in the case of an emergency where you need legal advice – you will be able to speak directly with legal experts who will advice on how best to dal with the Police, Health & Safety Executive and all other investigating and regulatory bodies.
- Legal and business risk management tools through their range of digital tools and solutions to help you manage your business effectively and in line with regulations and the law, such as an Online Resource Portal, Legal Assistant App, Digital Incident Reporting platform and Risk Analysis tool.
- Legal and regulatory updates delivered to you though a variety of digital platforms including webinars and newsletters, helping you stay up to date with the latest legislation and regulations that may impact your business
- Legal representation – full UK-wide legal representation should claims or investigations arise, from specialist legal teams.
Through use of the above tools, you and your business will benefit from legal advice that helps you be proactive and stay on top of regulation and responsibilities. However, we know this doesn’t mean a claim won’t come about.
In the event a claim is made against you or your business, the legal advice rradar provides is confidential and legally privileged, meaning that your discussions and the legal advice given are protected from disclosure to others. This is a huge benefit of AXA’s MLP policy, allowing you to speak freely and work with rradar to determine the best next steps.
If you have an AXA MLP policy already, please make sure you have registered with them to benefit from all the tools you have access to, completely free of charge! You can register here.
Want to know more?
You can sign up to a short 1 hour webinar to learn more about AXA’s Management Liability Policy specifically, and the services rradar provide within it, here.
Alternatively, give our dedicated Commercial Team a call on 01653 609151 or email them at commercial@mcclarroninsurance.com to learn more about how a Management Liability policy could benefit your business. If you’d prefer, you can fill out the form below.
Sources:
*https://www.gov.uk/government/statistics/tribunal-statistics-quarterly-april-to-june-2019
