Running a business creates legal exposure well beyond the risk of a fire or a break-in: employment disputes, regulatory investigations and claims of mismanagement can all end up in the hands of a solicitor, and defence costs start racking up whether or not the claim has any merit. Management liability insurance bundles the cover a growing business typically needs against this kind of exposure into one policy, rather than several separate ones.
Chris Knott Insurance arranges management liability insurance through trusted UK insurers, tailoring cover for start-ups, SMEs and more established organisations depending on their size and risk.
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First-class service. I dealt with Emma who was patient, helpful and knew exactly what I needed for my thatched cottage. Got proper specialist cover, not a standard policy.
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The policy typically combines three elements. Cover generally responds with defence costs from the outset, then any settlement or court-awarded compensation on top, subject to the specific policy's terms and limits.
This protects individual board members personally against a wrongful act claim, such as a breach of duty or negligence, brought against them; our directors and officers insurance page covers that element in more depth on its own. Claims of this kind can include an alleged breach of duty, a misleading statement made to investors or lenders, or wrongful trading, where a director is accused of keeping the company running after it should reasonably have stopped.
This extends similar protection to the company itself rather than just its individual directors, covering the business when it's named in a claim directly. Typical examples include a breach of contract dispute with a customer or supplier, a regulatory investigation into how the business operates, or an allegation of copyright infringement in something the company has published, marketed or sold.
This protects against employment-related claims such as unfair dismissal, discrimination and harassment, brought by current, former or even prospective employees, which is often the most frequently triggered part of the policy simply because employment disputes are common across almost every sector. An employment tribunal claim over a dismissal or a harassment complaint is the clearest example, and usually the first type of claim a growing business runs into.
A management liability claim doesn't only come from inside the company. It can be brought by:
Trading as a limited company protects shareholders: if the business fails, they generally stand to lose only what they invested, not their personal assets. That protection doesn't automatically extend to a director facing a personal claim over how they've run the company, such as a breach of duty or wrongful trading. Defending that kind of claim without insurance can mean paying legal costs, and any award, from personal funds.
If your main concern is protecting individual directors personally, standalone D&O insurance may be enough, particularly for a smaller company with few or no employees. Once a business has staff, though, employment practice liability becomes genuinely useful, since claims from employees are one of the more common sources of legal action a company actually faces, and a standalone D&O policy doesn't cover the company itself as an entity being sued directly. Management liability insurance is generally the better fit for a business with a workforce or a public-facing presence at meaningful scale, where the company's own exposure matters as much as any individual director's.
Worth keeping separate: employment practices liability covers disputes, not physical harm. An employee's workplace injury or illness sits under employers' liability insurance instead, a different, legally required policy for most businesses.
Because Chris Knott works with trusted UK insurers rather than a single provider, cover can be shaped around your sector, workforce size and risk profile rather than a one-size policy. Most policies are written on a claims made basis, meaning the policy in place when a claim is made responds to it, which is worth understanding before you switch providers.
Management liability doesn't automatically cover cyber incidents, even though a data breach can expose directors to claims too. Cyber insurance is a separate policy worth arranging alongside it. We're an independent, UK-based broker that's been arranging cover since 1983, with a 4.9-star Trustpilot rating from over 2,200 reviews you can check yourself, and we're not on the comparison sites. We're authorised and regulated by the Financial Conduct Authority (FRN 304452), and you can verify that on the Financial Services Register at register.fca.org.uk.
Chris Knott Insurance is great to deal with and always beats everything else on the market.
Neville Dugdale
The most common questions we're asked about management liability insurance. Can't find what you're looking for? Speak to our UK-based team on 0800 917 2274.
There's no fixed figure, and indemnity limits typically start from £1 million with higher amounts available depending on your sector and risk. It depends on your operating location, turnover, number of directors and employees, claims history, and how much personal assets exposure the directors are comfortable carrying themselves versus insuring against.
Yes, through the employment practice element, which covers dismissal-related claims, discrimination and harassment brought by employees. This is often the part of the policy that gets used most, since a shareholder dispute or a serious mismanagement claim is comparatively rare, while an employment tribunal claim is something almost any employer can face at some point.
Only up to a point. It protects shareholders from personal liability for the company's debts, but it doesn't shield directors from a personal claim over how they've run the business. A director accused of a breach of duty or wrongful trading can still face a claim against their own assets, which is the gap that directors and officers cover is designed to close.
They cover different risks. Management liability responds to claims about how the business and its directors are run, such as mismanagement or an employment dispute. Professional indemnity insurance instead responds to claims about the advice or professional services you provide to clients. Many businesses that give professional advice need both, since one covers the business and the other covers what it sells.
Deliberate dishonesty, fraud, and criminal acts aren't insurable, in line with D&O cover generally, since a policy shouldn't let someone profit from their own intentional wrongdoing. A breach a director or the company already knew about before the policy started is typically excluded too, so it's worth reading the policy wording for the full list of exclusions rather than assuming blanket protection.
You can make a claim by contacting our team directly, and we'll talk you through what's needed. Notifying us as soon as a potential claim arises matters more with this kind of cover than most, since delayed notification can affect whether a claim is accepted.
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ExploreEvery page is written and fact-checked by our UK-based insurance specialists. Chris Knott Insurance has been arranging cover since 1983.
Call our UK-based team on 0800 917 2274 or email enquiries@chrisknott.co.uk to get a quote built around your company's structure and risk. We're open Monday to Friday, 9am to 5pm.
*Chris Knott Insurance is authorised and regulated by the Financial Conduct Authority (FRN 304452). You can check this on the Financial Services Register at register.fca.org.uk.*
