Management Liability insurance explained
What is management liability insurance?
Management liability covers you for:
- Legal costs and expenses in defence of a claim
- Damages and compensation awarded against you
In the event of:
- A claim against a director, officer, trustee or manager of an organisation.
Why is management liability insurance important?
While most organisations are protected through public liability and other insurances, the individuals within the company are often unprotected. It is important to recognise that individuals involved in the management and decision making for care organisations bear considerable responsibility both for their actions and the actions of the organisation they represent.
Making an incorrect decision on a seemingly minor issue can put the individual at risk of compensation claims, legal action or official investigations being directed towards them personally.
What can go wrong?
Management liability insurance would protect your organisation in the following example scenarios:
- Risk assessments not followed
A manager of a centre providing respite care was investigated when a service user choked on their food and was hospitalised because the relevant risk assessments were not followed. The actions of the manager were investigated by the police and the Health and Safety Executive (HSE).
- Alleged false accounting
An organisation providing care for vulnerable adults went into liquidation. Disqualification proceedings were brought against the finance director by the Insolvency Service. The Insolvency Service alleged that the director had obtained over £400,000 through false accounting.