No matter how large or small your company is, you need insurance coverage you can count on. Management liability insurance covers legal fees and damages when you are accused of a conflict of interest, bad fund management, privacy breaches or unfair practices. Most executive liability packages are designed to protect companies on three different levels. They protect individual managers, reimburses the company when it protects its managers and covers the company itself when it is the defendant in a lawsuit.
The directors and officers themselves sometimes need individual protection. A solid D&O policy protects their individual assets if they are sued for unfair business practices or other issues that are unique to management. If the company compensates officers for losses suffered as the result of a particular incident, an indemnication of officers policy can reimburse those costs to the company. If the whole company is named as a party in a lawsuit, entity coverage can be used to cover legal fees as well as settlement costs, if applicable.
The amount of coverage needed varies depending on industry, company size and risk, but all businesses that provide professional services can benefit from management liability insurance. Hopefully, you will never have to use it, but it is better to have it and not need it than to need it and not have it.