Three Critical Concerns to Address before Purchasing Management Liability Insurance
Management liability insurance is essential for protecting you and your business from the losses and risks associated with mismanagement. If you are not protected from this type of liability, you will risk losing your company, and your personal assets might also be affected. Under ideal circumstances, your management liability insurance will protect you against financial losses related to claimant costs, awarded damages, legal fees, civil fines, investigation costs and pecuniary penalties. However, you should note that each insurance policy will have unique characteristics. If you choose the wrong cover, you might not get ideal protection. Here are some common concerns that you should address when choosing your management liability insurance.
Time Limit for Claim Trigger Notice
In general, management liability insurance policies have specific provisions on giving notice in the event of a claim trigger. Simply speaking, the policyholder must provide their insurer with the claim notice within a predetermined period of time. The requirements for the time limits are often quite clear. However, numerous policyholders still experience losses by providing late notices. In most cases, this problem can be attributed to a break in communication. For instance, the person with the information on the claim might not be in charge of insurance matters. Therefore, you should discuss the modification of the generic time limit provision with your insurer. For example, the time limit countdown should only begin when the insurance handler in your business is notified.
Antitrust Exclusion Claims
You should discuss any antitrust exclusion clauses included in the policy before purchasing management liability insurance. In some cases, this exclusion label is misleading and can leave significant gaps of coverage without you realising it. You might assume that the antitrust exclusion will only include antitrust allegations. However, the insurer could actually use the label to preclude other related claims, including monopolisation, price fixing and restraint of trade. Therefore, you should check your preferred policy for this type of exclusion policy. Where possible, you should avoid the relevant insurance policy completely. If you are set on the cover, you should consult your lawyer for counsel before making a decision.
Losses Resulting From Scams
Social engineering attacks such as phishing, whaling and baiting have become more common in businesses. In simple terms, malicious persons use scams to obtain information and money through fraudulent email communications and websites. Some management liability insurance cover will cover financial losses related to hacking. However, social engineering scams are often excluded. You should inquire about this issue when purchasing your cover to avoid the gap.