Management Liability

Management Liability (ML) insurance combines Directors and Officers Liability (D&O), Employment Practices Liability (EPL), and Fiduciary Liability (FL) insurance. It offers a wide scope of coverage that minimizes business related risk for any company, protecting both the interests of owners and principals.

The greatest benefit of a Management Liability (ML) policy is Employment Practices Liability (EPL). This coverage mitigates risk stemming from claims against wrongful termination, discrimination and sexual harassment. Management Liability insurance also provides protection from claims of mishandling investment funds or failing to carry out investment instructions, thus providing protection from shareholder suits alleging improper acts of “corporate governance.”

PRF through C.N.A. provides broad policy language including:

• Duty to Defend policy
• Claims made form with a 90 day post-policy reporting window
• Mediation Provision, which could reduce the policy retention by 50% or $10,000, whichever is less
• Worldwide Coverage – claims can be brought anywhere in the world
• Spousal Coverage including Domestic Partner
• No threshold for coverage for newly created or acquired entities or plans
• Pre-Claim Assistance for investigation costs related to reported circumstances
• Punitive Damages coverage (most favorable venue)
• Predetermined Extended Reporting Period percentages for 1, 2 and 3 years
• Supplemental Payments: $250 per day per person up to $2,500 per claim per policy year for attending trials, hearings, arbitrations, or mediation at the insurer’s request
• Consent to Settle provision set at 80/20
• Policy is non-rescindable with respect to insured persons for non-indemnified loss

Coverage highlights specific to individual coverages:

• Additional $1 million Limit for Non-Indemnified Loss (Side A)
• $250,000 Investigative costs sublimits arising out of all Shareholder Demands
• Waiver of retention for Insured Persons for a finding of No Liability
• Coverage for Outside Entity Executive extended to non-profits beyond 501c(3) entities to include 501c(3)(4)(6)(7) and (10)
• Carveback to Insured v. Insured exclusion for whistleblower activity
• “Final Adjudication” language in the fraud and illegal profit exclusions
• Affirmative private placement coverage
• Carveback to public offering exclusion for failure to go public
• HIPAA fines and penalties sublimit of $100,000
• Definition of Insured Person includes a trustee, governor, management committee member of a joint venture, and employees
• Carveback to the insured v. insured exclusion for claims brought by former
• Directors and Officers who have not been a Director or Officer for at least 3 years
• Severability of the personal conduct exclusions