There are about 40 million lawsuits filed in the US every year.

Many people dream of owning their own business, but it can take a lot more work than most people realize. There are all sorts of risks involved, and there may be legal issues you end up facing. Having the right protection will help keep your organization safe and secure.

Management liability insurance can offer different types of coverage. These types can be implemented as stand-alone policies, or combined into a single package. Private companies and non-profit organizations typically use it.

In this guide, we’ll look at some of the main reasons you should invest in management liability coverage. Keep reading for more.

1. To Protect Directors and Officers

One of the coverages available is directors and officers insurance (D&O). This helps to protect directors and officers if someone tries to sue them personally while managing a non-profit organization or company.

D&O insurance can cover a range of costs and settlements from things like wrongful action allegations and lawsuits brought against board members, executives, or officers within an organization. It’s worth noting that an officer or director could be involved in a lawsuit for a company even if they no longer work there.

2. To Protect Your Organization From Employee, Applicant, or Third-Party Lawsuits

One of the other types of coverage offered by management liability insurance is employment practices liability insurance (EPLI). This coverage can safeguard an organization if there’s an allegation of an employment practices violation from an employee, applicant, or third party.

This coverage can protect an organization and its employees. It covers current full-time employees as well as those who are:

• Part-time
• Seasonal
• Temporary
• Past employees
• Volunteers
• Applicants

Employment claims can cause various issues. On top of the costs incurred, they can damage a company’s reputation. They may also lead to decreased morale, reduced productivity, and lost trust.

Some of the allegations that EPLI covers include:

• Discrimination
• Sexual harassment
• Wrongful termination
• Violation of an employee’s civil rights
• Deprivation of a career opportunity
• Retaliation by an employer
• Failure to employ/hire/promote
• Infliction of emotional distress

3. To Protect Your Organization From Other Claims

A third type of coverage is Fiduciary Liability Insurance. It can protect an organization from claims of mismanagement of a company’s benefit plan. This refers to things like medical benefits, 401Ks, retirement plans, dental, life, and disability.

According to the Employee Retirement Income Security Act (ERISA), fiduciaries should act in the best interest of the plan participants. They can be held liable for mismanagement of the plans. This type of protection covers losses that occur due to someone’s negligent administration of benefit plans.

Management Liability Coverage for Your Organization

The importance of proper coverage cannot be understated. If you find yourself on the wrong end of a lawsuit and you aren’t protected, it could be devastating for your organization.

Soden Agency can help your organization establish proper protection using management liability coverage and other types of insurance. You can discuss your organization with our team, and we’ll be able to recommend the best coverage for you.