Management Liability Insurance

Management Liability Insurance – Planning Ahead for Proper Protection

Brown & Brown Northwest Mountain | BBNW Portland, OR

Management liability protection should be considered by commercial businesses, professional service firms, and non-profit organizations where management responsibilities are sometimes delegated to employees or others beyond the entity’s directors and officers.


The specialized coverage provided by Management Liability insurance may be offered as an optional coverage at an additional premium on a Business Owners Policy (BOP) or Commercial Package Policy (CPP). It can also be included in a customized commercial insurance plan.

Brown & Brown Northwest - Management Liability Insurance

Brown & Brown Northwest Mountain | BBNW Portland, OR

Coverage Options for Your Business


  • Directors & Officers Liability: Protects directors and officers of a corporation against damages from claims resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation for expenses incurred in defending lawsuits arising from alleged wrongful acts of directors or officers.
  • Employment Practices Liability: Protection for claims arising out of employment practices were claims allege demotion or failure to promote, negative evaluation, refusal to employ, termination, denial of training or career opportunities, breach of employment contract, negligent hiring or supervision, retaliatory action, coercion to perform an illegal act,  or humiliation and other types of verbal, physical, mental, or emotional abuse that comes from discrimination as defined in the insurance policy and is a result of work related activities. Definition of wrongful acts will vary by carrier.
  • Professional Errors & Omissions Liability: Provides protection against an alleged wrongful act failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the professional.  Coverage is generally written on a claims made basis with defense costs included within the limit.
  • Fidelity (Crime) Insurance: Crime coverage rounds out a property insurance program by providing coverage for:  Money & Securities, Dishonest or Criminal Acts committed by employees (except by the named insured), and loss that results from a theft of money.  Fraudulent scheme in which the insured voluntarily parts with the property are normally excluded.  However, Social Engineering coverage can be purchased to help protect this risk..
  • Fiduciary Liability: Protection for those who administer pension and welfare funds, profit-sharing and other employee benefit programs against loss for errors and omissions by the administrator.
BBNW Insurance - Management Liability Insurance

Brown & Brown Northwest Mountain | BBNW Portland, OR

Discover the Right Coverage for Your Business


  • Automatic “outside directorship” liability coverage for 501(c)(3) non-profit organizations
  • Broad definition of employment practices claims
  • Broad definition of the insured, including the company, directors, employees, independent contractors, and leased employees
  • Business tort coverage, such as claims for interference with contractual relations
  • Coverage for claims brought by partners not involved in the firm’s management – an internal exposure not offered by traditional D&O and E&O policies
  • Coverage for claims of mismanagement or negligence in the day-to-day business decisions made by the firm’s management committee or executive officers
  • Coverage for partnership agreement and compensation disputes
  • Coverage for subsidiaries
  • Defense for claims seeking enforcing of a contract
  • Non-employment discrimination coverage, which protects against discrimination and sexual harassment claims brought by third parties (customers and clients), whether individually or as a class
  • Spousal coverage
The Brown & Brown Difference | BBNW Portland, OR

Brown & Brown Northwest Mountain | BBNW Portland, OR

Proper Coverage is Only Step One


Your best risk management defense is to craft a very specific plan for responding to management liability claims. The following elements should be addressed in your plan:


Report the claim to your agent and your insurer as soon as possible and in accordance with the requirements of your policy. Does the company accept a verbal notification, or are you required to notify in writing?


Contact your agent and legal counsel and request that they represent you in the claim. You should determine who this is before a claim occurs. Your insurer may provide you with someone, otherwise look for one who has experience with management liability claims in your industry.


Document relevant conditions and gather information. Consider gathering documents, taking notes and photographing anything relevant to the claim. When possible, this should be done in the presence of your insurer or legal counsel.


Identify or hire an expert. The claimant will generally hire an expert witness to testify that you breached your professional duty, so you should have an expert to defend your work. This could be a third-party or even you or someone from your firm.


Designate a claims management project team within your office. Who will handle assembling and reviewing documents, chronicling events leading up to the claim, communicating with involved parties, attending depositions and other necessary duties?