Management liability
What is management liability insurance?
Management liability insurance, also known as directors and officers (D&O) insurance, provides financial protection to the company's management team against claims related to management decisions. It protects against lawsuits alleging wrongful acts such as breach of fiduciary duty or mismanagement. Can include additional coverage for employment practices, fiduciary, and employee crime. It is purchased by companies of all sizes and is particularly important for startups and companies with a board of directors.
What does management liability cover?
Directors & Officers
Employment Practices Liability
Fiduciary and Crime
Who needs management liability insurance?
Startups and businesses of all sizes that have a board of directors or management team. If you have raised capital from venture capital or intend to you will often be required to show proof of management liability insurance. It is a crucial protection for your founders, management team, cap table, and the future of your business.
See if you're covered
Small Business Owner
Managing your own business means you have enough on your plate.
Startup
Don't let unnecessary business risks make your founder journey bumpier than it needs to be.
Why is management liability important?
Regardless of industry or size, a management liability policy can protect your startup or business from financial and legal risks associated with the company's management team and employees. Venture capital and other investors require proof of management liability insurance in order to finalize investments and suffice diligence requirements.
See if you‘re coveredWhat other kinds of business insurance do I need?
Bodily Injury
Someone other than you (or an employee) is injured and your business is responsible for medical, legal and damages.
Third-Party Property Damage
Customer property is damaged by you (or an employee).
Advertising and Reputational Injury
Your business is accused of copyright infringement, malicious prosecution, slander, libel, wrongful eviction and violating a person's privacy.
Product Liability
Products developed or sold by your business harm people or property, and your business is responsible for legal and medical expenses.
Management liability insurance FAQs
- What happens if I don't have management liability insurance?
- Without management liability insurance, executives, founders and board members may be personally liable for damages resulting from legal claims against them. This can result in significant financial losses and reputational damage for both the individuals and your company. In addition, the absence of management liability insurance may make it more difficult to attract investors and partners who are concerned about risk management and corporate governance.
- Why do startups need management liability insurance?
- Startups need management liability insurance to protect their executives and board members from personal financial loss resulting from lawsuits and legal claims. It also helps protect the company's assets and reputation by providing a defense against claims and promoting good governance practices.
- Are startups required to have management liability coverage?
- Venture capital investors often require management liability insurance prior to finalizing due diligence. It shows proper risk management practices and protects your execs and board members from potential liabilities, giving peace of mind to investors and employees. It can also help attract investors and top talent.
- How do I show proof I have a management liability policy?
- Once you've purchased your management liability policy, a Certificate of Insurance (“COI”) will be sent to you and can be presented to any party or investor that requires proof of coverage. You will also receive your management liability policy documentation which can be presented the any third-parties as well.
