Management Liability Insurance

Claims examples:

Environmental Prosecution—Directors & Officers Liability

Directors are liable for prosecution if their business is suspected of pollution damage. In one case, charges against a director went ahead – even though the company had confirmed their tanks did not even hold the contaminant identified in an adjacent stream.

Breach of Contract—Corporate Liability

A company is sued by its former agents after it terminates their contracts in order to replace them with full-time staff. The agents sue for non-payment of commission. Overall settlement and defence costs reached 6 figures.

Employee Fraud—Fidelity/Crime Protection

An employee who processes invoices also has access to the supplier creation system. The employee sees that when invoices are approved for payment, the financial controller examines the largest payment in detail  and then signs the rest. The employee creates a false supplier and makes many small payments totalling thousands of dollars over several months.

Unfair Dismissal—Employment Practices Liability

A business owner dismissed an employee from employment as a result of a workplace incident.

The employee has alleged that the termination of employment was unfair Policy provides defence costs and damages awarded, other than the employer’s obligations to pay the employee pursuant to a contractual or statutory entitlement.

Discrimination—Employment Practices

Discrimination in termination of employment

The claimant alleged that his employment was terminated on the grounds of discrimination because of his learning disability. The insured advised that it was a redundancy due to a restructure. They had offered the claimant an alternative position which he rejected.

The proceedings before the Commissioner were dismissed. Policy covered defence costs.

Worksafe incident—Statutory Liability

6 people were injured in a gas explosion.

WorkSafe had conducted an investigation and issued, and lifted, a prohibition Notice.

The insured was then served with a Summons and Complaint & charged by the Work Health Authority.

Penalties were imposed on the insured totalling $121,200 (despite entering an early plea) and legal costs amounted to about $150,000 in defending the prosecution.

ACCC Penalties—Statutory Liability

ACCC commenced an investigation against chicken breeders regarding allegedly false and misleading advertising in relation to definition of “free to roam”.

Subsequently ACCC issued proceedings in the Federal Court against the business owners.

The matter involved difficult and diverse issues and ultimately went to hearing. A decision was not delivered for some 15 months after hearing. The court imposed a penalty of $10,000. Legal costs incurred in defending the proceeding exceeded $150,000.