Management Liability Insurance: A Broker’s Guide
Corporate America is no place for the faint of heart. From allegations of wrongful termination to breaches of fiduciary duty, the potential for lawsuits is always there. This is why making sure executives are backed by comprehensive management liability insurance is so important.
As a wholesale broker, understanding the intricacies of management liability insurance is essential to effectively guide your agents and clients through the process of securing the right coverage for their unique needs. With the proper knowledge and expertise, you can help protect your clients’ personal and corporate assets, attract top talent to their boards, and ensure compliance with contractual requirements.
In this broker’s guide, we’ll explore what management liability insurance covers, why clients need it, the exposures that go into evaluating a risk, and the benefits of partnering with Distinguished. By the end of this article, you’ll be ready to start confidently helping your clients get the insurance they need.
What Does Management Liability Insurance Cover?
Management liability insurance is a comprehensive set of coverages designed to protect companies and their leadership from a wide range of potential risks. Here’s a breakdown of the key components:
- Directors & Officers (D&O) insurance: D&O coverage protects the company, its directors, officers, and employees against allegations of breach of fiduciary duty. This can include claims related to alleged mismanagement, negligence, or improper disclosure.
- Employment Practices Liability (EPL) insurance: EPL coverage safeguards the company and its employees from claims of wrongful termination, harassment, discrimination, and other employment-related issues.
- Fiduciary liability insurance: Fiduciary coverage protects the company and employees responsible for managing retirement and benefit plans from alleged violations of the Employee Retirement Income Security Act (ERISA).
- Claimants: Claims under management liability insurance can come from shareholders, employees, lenders, regulatory bodies, competitors, customers, vendors, and other third parties.
With Distinguished’s Executive Lines Insurance program, you also get:
- A solution for all types of risks: We offer primary and true excess follow-form products for publicly traded, privately held, and non-profit organizations. This includes a variety of specialized exposures, including regulatory actions, antitrust claims, wage and hour disputes, and immigration-related issues.
- Offer Creative Primary Solutions: with customized risk specific terms and conditions, and the ability to offer stand-alone or blended coverage.
- Enhanced coverage with tailored endorsements for primary healthcare and education organizations: For clients in the healthcare and education sectors, we provide enhanced coverage through carefully crafted endorsements that address their unique risks and exposures.
Why Do Clients Need Management Liability Insurance?
When meeting with corporate clients, it’s important to be able to explain why comprehensive management liability insurance provides critical risk protection for their business. Here are some key reasons that can help you convince these clients that they need this coverage:
- Protect personal and corporate assets: Without adequate insurance, your client’s and the company’s assets could be at risk from management liability claims. Management liability insurance mitigates the company’s financial exposure associated with legal fees, settlements, and judgments.
- Cover defense expenses: Defending against management liability claims can be incredibly costly. Management liability insurance will cover legal fees and expenses so your clients can fight the suit without draining company resources.
- Satisfy contractual requirements: Many vendors, lenders, and other business partners require companies to carry management liability insurance as a condition of doing business. With these coverages in place, your clients can avoid potential breaches or lost opportunities.
- Attract high-quality board members: Serving on a company’s board of directors comes with significant responsibilities and potential liabilities. Having a comprehensive management liability insurance policy in place can help attract and retain board members who might otherwise be hesitant to take on such roles.
- Provide indemnity in case of financial loss or bankruptcy: In the event of a company’s complete financial loss or bankruptcy, management liability insurance can provide indemnity to directors and officers. This coverage ensures that they are protected even if the company is unable to fulfill its indemnification obligations.
How Much Does Management Liability Insurance Cost?
The cost of Management Liability Insurance is highly dependent on your client’s specific risks and characteristics. For this reason, every quote is different, tailored, and priced specifically for each insured.
Here are some of the factors our underwriters will consider when determining the cost of a quote for your client:
- Industry
- Location
- Asset and revenue size
- Employee Count
- Financial stability and performance
- Claims history
- Management experience
- Desired coverage limits and deductibles
We have the capabilities and experience to underwrite companies of all shapes and sizes. This includes companies that are experiencing financial challenges, or going through mergers, acquisitions, or restructuring.
We are happy to entertain most risks. Please reach out to any of our insurance experts if you are interested in learning more.
What Are the Benefits of Partnering With Distinguished?
Management liability insurance is a product that agents and wholesale brokers should be offering all of their clients.
Here are just some of the key benefits you get by partnering with Distinguished:
- Experienced underwriters: Our underwriters are highly experienced and have the authority to make fast, intelligent decisions, ensuring that your clients receive the coverage they need when they need it.
- Exclusive wholesale distribution channel: We partner exclusively with wholesale brokers, which allows us to focus on providing exceptional products and service to your clients, while you grow and retain your client base.
- E&S underwriting mindset: Our team approaches each risk with an excess and surplus (E&S) mindset, which means we’re willing to think outside the box and craft creative solutions for complex risks.
- Innovative coverage solutions: Our underwriters excel at creating customized coverage solutions that address each client’s specific risks and exposures. We work closely with you to understand your clients’ needs and develop policies that provide the ideal amount of protection at the desired price point.
- Allow for top-heavy excess limits: We can provide additional excess limits, giving your clients the peace of mind that comes with knowing they have ample coverage in the event of a catastrophic loss.
- Stand-alone or blended coverage: We offer the flexibility to provide management liability coverage on a stand-alone basis or as part of a blended policy. This allows you to tailor coverage to your client’s specific needs, whether they require a comprehensive package or targeted protection for specific exposures.
Sign Up With Distinguished Today
Ready to provide your clients with the comprehensive management liability coverage they need?
If you are a wholesale broker, then getting started with Distinguished Executive Lines is easy. First, if you haven’t already, register your agency by contacting Ryan Becker at rbecker@distinguished.com.
Next, gather the necessary information to obtain a quote: a completed application form, financial statements, loss history (for private and non-profit firms), or a ticker symbol (for publicly traded companies). Once you’ve got everything you need, you can send that information to Ryan Becker using the same email address as above.
If you have any questions, please reach out to rbecker@distinguished.com or check out our Executive Lines Program Page.
About Distinguished Programs
Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Fine Art and Collectibles, Environmental and Construction Professional, Executive Lines, Inland Marine, Real Estate, Community Associations, Surety, Hotels, and Restaurants. Property and Liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished’s high-limit Umbrella programs remain the clear choice in its area of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.
View a full list of our programs and submit business with Distinguished.
