What is Directors & Officers/ Management Liability Insurance? 

There are hundreds of laws and regulations in states and territories that directors and officers must comply with when managing or operating a business, including OH&S, workplace risk, Corporations Laws, ASIC, and environmental laws.  

D&O (large companies) and Management Liability (SMEs) insurance covers directors, officers and senior managers against actual or alleged acts, errors or omissions arising out of the operation or management of the company. The cover is for personal legal defence costs, as well as paying for any damages awarded for a breach of work-related duties and responsibilities. The policy will also reimburse the company for any legal costs advanced to the director or officer.  

Why is D&O Insurance important?

Directors and Officers Insurance not only covers the personal liability of directors, officers and senior managers, but it will also reimburse others for any financial losses they’re incurred due to mismanagement. 

Examples of claims include:

• wrongful dismissal of an employee
• email-related misconduct
• breach of contract
• OH&S breaches
• environmental breaches. 

What does D&O Insurance cover?

The main covers provided include:

1. Managers Liability - covers directors and officers for personal liability arising from claims made against them as a result of their role as managers of the company, where the company is unable or unwilling to pay their defence costs or damages.
2. Company Liability - provides cover to the company itself for claims made against the company arising from an alleged wrongful act or omission of the company. This is the key difference between Directors and Officers and Management Liability cover for privately owned businesses; otherwise, directors would still have to fund the defence costs for claims against the company out of their own pockets (as the company is treated as a separate legal entity when action is brought).
3. Employment Practices Liability - provides cover for alleged employment breaches, such as discrimination, harassment, bullying, failure to promote, breach of contract, retaliation and wrongful termination.
4. Crime – provides protection for your business when there has been a direct financial loss such as theft of money, securities and property. This can include employee fraud or dishonesty, third-party crime, electronic and computer crime, destruction and damage of money.
5. Statutory Liability (legal defence costs only) - (legal defence costs only) – provides cover for defence costs incurred from any formal investigation by a regulatory/government/professional body or other authorised institution. It also covers any fine or penalty imposed (where legally permitted and subject to policy conditions). The policy can also include a number of extensions, such as cover for legal costs associated with preparing and attending Workplace Health and Safety inquiries, and the accounting costs incurred during a tax audit/investigation.

It’s important to understand the difference between Professional Indemnity and Management Liability Insurance. The easiest way to look at the two insurance covers is that Professional Indemnity covers financial loss incurred by a customer who relies on your professional advice or work. Management Liability, on the other hand, protects your business and the personal assets of management against financial losses, due to allegations or actual mismanagement, misconduct, or legislative breaches.

At Insurance Advisernet, we’ll work with you to understand your business and provide advice on the best way to manage these risks, including the appropriate type and amount of insurance cover.

Frequently Asked Questions

What type of D&O or Management Liability insurance should I buy   

As it’s a package, you can choose the basic Management & Company Liability section or add on Crime, Employment Practices and Tax Audit covers. It really depends on the size and nature of your business and the level of risk you’re willing to carry. Insurer cover varies – for example, some offer pollution defence costs, while others offer special cover for labour-hire companies. These are some questions to consider when taking out D&O or Management Liability insurance.

Do I need D&O / Management Liability Insurance? 

All companies and businesses of any size can benefit from this insurance cover. Both small and large companies have exposure to employment practices, claims, crime and investigations. As a key premium rating factor is based on size and revenue/ turnover, the premiums are smaller for SMEs than for large companies. 

Is D&O / Management Liability Insurance the same as Professional Indemnity Insurance – No, it isn’t.

No, Professional indemnity and Management Liability insurance cover different risks. Professional Indemnity covers financial loss allegedly or actually incurred by a customer who relies on your professional advice or work. Management Liability, on the other hand, protects your business and the personal assets of management against financial losses, due to allegations or actual mismanagement or misconduct that cause a financial loss to the company or shareholders. 

What is Motor Vehicle Insurance? 

Motor Vehicle Insurance is specifically designed to cover registered and unregistered motorcycles, cars and trucks. There are two main types of cover that you can choose. The first covers the damage your vehicle could cause to other people’s property following an accident, plus related legal costs, this is called Third Party Property Damage (TPPD) cover. 

The second type of cover will provide some level of protection to your own vehicle, depending on your needs. Comprehensive cover will pay for repairs or the value of your vehicle if written off or stolen. There is also an option available that covers damage due to fire or theft of the vehicle. Both Comprehensive and Fire & Theft Insurance automatically include TPPD cover.

Motor Vehicle Insurance is not compulsory, so you can choose the type of cover that’s suitable for your needs. If your vehicle is financed, the bank or finance company will often require Comprehensive Insurance to be in place.

It’s also important to remember that Motor Vehicle Insurance doesn’t cover personal injury to passengers or others or legal defence costs. This is often called Compulsory Third Party (CTP) Insurance and must be purchased before you drive the vehicle.

Why is Motor Insurance important?

Car accidents often happen, and people are injured, or vehicles are damaged or stolen. The damage to your car can be very expensive to repair, and you may also be responsible for repairing the other vehicle, as well as paying legal costs. Finding the money to pay for repairs, or to buy a replacement vehicle if yours is stolen, can be difficult.

Insurance is a way to manage financial risk. It’s easier to budget for an annual insurance premium than making sure you have enough money in the bank to pay for repairs or buy a new car – which could easily be tens of thousands of dollars.

So, whether you own a motorbike, a ute, or operate a fleet of trucks, some level of Motor Vehicle Insurance cover is essential.

What does Motor Insurance cover?

Motor Vehicle Insurance can come in different forms – for example, some insurers specialise in trucks, while others have insurance cover especially tailored for motorbikes. We recommend exploring your options to compare insurers and insurance covers. 

The main types of insurance are:

1. Private Car Insurance - for individuals or families, with passenger sedans, SUVs, people movers, station wagons and utes not used for business. This can include specialist cover for unique or vintage vehicles rarely driven. Either Comprehensive or TPPD-only cover can be purchased. Optional extensions for the Comprehensive cover include extras on and in the vehicle, and hire of a replacement car for up to 21 days following the theft.
2. Motorcycle Insurance - for individuals, families or businesses that own or ride quad bikes, ATRs, dirt or road bikes. Either Comprehensive or TPPD-only cover can be purchased. Optional extensions for the Comprehensive cover include extras on and in the vehicle, and hire of a replacement bike for up to 21 days following the theft.
3. Commercial Vehicle Insurance - for large or small businesses that own or lease sedans, SUVs, utes and trucks. This policy can cover specialist vehicles such as mobile cranes, refrigerated transport, and trucks that can load and unload goods. Either Comprehensive or TPPD-only cover can be purchased. Optional extensions for the Comprehensive cover include extras on and in the vehicle, and hire of a replacement car for up to 21 days following an accident or theft.
4. Fleet Insurance - for large businesses that own or lease large fleets of sedans, utes, trucks and mobile plant. This policy is designed to cover a large number of vehicles, including specialist vehicles such as mobile cranes, forklifts, refrigerated transport and trucks that can load and unload goods. Either Comprehensive or TPPD-only cover can be purchased. Optional extensions for the Comprehensive cover include automatic cover for new vehicles, tools and equipment, extras on and in the vehicle, and costs to hire a replacement vehicle following accident or theft.

Insurance Advisernet is a specialist in all types of Motor Vehicle Insurance and can help you every step of the way.

Frequently Asked Questions

What is Motor Vehicle Insurance? 

Motor Vehicle Insurance is a specialised cover designed for all types of vehicle owners to protect themselves from financial loss resulting from loss or damage to their vehicle. It also covers the costs of repairing other people's cars, trucks, or property if they are responsible for the accident, as well as legal defence costs.

 What insurance is the best for my vehicles 

Different people require different types of cover, depending on the level of protection they need and the type of vehicle. For example, motorcycle owners would consider some level of Motorcycle Insurance cover, while owners and operators of a refrigerated trucking company would consider Fleet Insurance.

Which are the key types of motor vehicle insurance? 

While there are lots of different products on the market, the main categories are: 

(1)    Private Car Insurance
(2)    Motorcycle Insurance
(3)    Commercial Vehicle Insurance 
(4)    Fleet Insurance.

Why do I need motor vehicle insurance? 

Motor insurance is a way to manage your financial risk. It’s often easier to budget for an annual insurance premium than making sure you have enough money in the bank to pay for expensive repairs or buy a new car, as well as any legal bills – which could easily add up to tens of thousands of dollars.

You must buy Compulsory Third Party (CTP) Insurance before you drive the vehicle if it is registered. The type of insurance and amount of cover will vary, depending on what you use the vehicle for, and the value and level of protection you need. If the vehicle is financed, Comprehensive Insurance is generally required.