Some claims name the business. Others name you.
Management liability answers claims made against directors, officers, partners and trustees personally, and against the company for the decisions it took. Different insured, different trigger, and a separate contract from the policies that cover the business itself.
Management liability and D&O insurance
Usually includes
Directors & officers liability
Company reimbursement
Corporate legal liability
Employment practices liability
Pension trustee liability
Regulatory & criminal investigation costs
Know your cover
Mostly it buys lawyers, for years.
Every other policy a business buys protects the business. This one also protects the people who run it. A director, an officer, a partner or a trustee can be sued personally for a decision taken in that role, and what is exposed is their own money rather than the company’s. What the policy mostly does is fund the defence, for as long as it takes.
The insured is a person
The cover follows the individual, not the job. That matters most in the cases where the company cannot help: insolvency, a claim brought by the company itself, or an indemnity the law does not allow.
Claims made, not decisions taken
The trigger is the date somebody sues, not the date of the board meeting. Let the policy stop and the decisions already taken lose the contract that would have answered for them.
It funds the defence, not the fine
Most of what this policy does is pay lawyers, often for years. A criminal fine is a punishment and cannot be insured, whatever the allegation turns out to be worth.
What we cover
What each cover does, and where it stops.
The cover, the conditions attached to it, and the things it typically won’t reach, set out side by side rather than three clicks apart.
Cover
What comes with it
Commonly excluded
Directors & officers liability
Claims made against a director, officer, partner or trustee personally.
The core of the policy, and the section that answers where the company cannot indemnify the individual: insolvency, a claim brought by the company itself, or an indemnity the law does not permit. Defence costs are normally advanced as the matter runs rather than repaid at the end, and extradition and asset-freezing costs appear on many wordings.
Anything the individual gained dishonestly or knew to be wrong, once that is established. Bodily injury and property damage, which are the liability policies. Any matter already known about when cover started.
Company reimbursement
Where the company has indemnified an individual, the policy pays the company back.
Answers the company’s own cost of standing behind a director, and it is where the policy excess normally sits, because the personal section usually carries none. In practice this is the section that responds most often, since most of the time the company does indemnify.
Any indemnity the company was not permitted to give. Anything beyond what the individual could have recovered themselves. The excess, which sits here rather than on the personal section.
Corporate legal liability
Claims brought against the company itself for the decisions it took.
Sometimes called entity cover. It reaches claims against the company arising from a wrongful act rather than from injury, damage or professional work, each of which is covered by a different policy. What this section includes varies more between wordings than anything else on this page, so it is worth comparing rather than assuming.
Anything arising from professional services, which is professional indemnity. Injury and damage, which are the liability policies. Liabilities the company took on by contract.
Employment practices liability
Claims brought by employees, former employees and candidates.
Unfair dismissal, discrimination, harassment, a failure to promote and the rest, answered against the individual manager as well as the company, with its own limit. If you also hold a legal expenses policy, that one answers the business’s employment disputes, and on most wordings the awards as well as the defence, on condition that you call its helpline before you act; this section is wider, reaches the individual manager too, and carries no such condition.
Redundancy and notice pay you owe anyway. Anything already in train when cover started. A deliberate act, once established. Bodily injury, which is employers’ liability.
Pension trustee liability
Claims against the people who run an occupational pension scheme.
A trustee can be personally liable for how a scheme is administered and invested, whether they are a member of staff, a director or an independent appointee. Written for occupational schemes, and it normally needs the scheme declared and its assets disclosed before it attaches at all.
Benefits the scheme owes its members, which are the scheme’s liability rather than an insurable loss. A personal pension arrangement. Anything arising from contributions that were never paid across.
Regulatory & criminal investigation costs
Responding to an investigation into an individual, before any claim exists.
Funds legal representation when a regulator or a prosecutor asks an individual to attend, produce documents or answer questions. It engages earlier than the rest of the policy, which is why notifying the first letter matters more here than waiting for a formal allegation to be made.
An investigation into the company alone, on many wordings. Routine regulatory correspondence and audits. Costs run up before the insurer was told.
Health & safety prosecution defence
Defending an individual prosecuted over how the business was run.
Funds the defence of a director or a manager prosecuted under health and safety or corporate manslaughter law, including the preparation and the advocacy. Notify the moment a notice arrives rather than once a hearing date is set, because the early work is where the cost is.
The fine or penalty if you are convicted, which cannot be insured. Any deliberate act. Proceedings brought against the company alone, which is legal expenses.
Run-off cover
Cover kept in force after a sale, a closure or a resignation.
Because the policy is claims made, the cover has to outlast the appointment. Run-off keeps it live for decisions already taken, for a period the insurer agrees rather than indefinitely, and it is normally arranged as part of a sale rather than remembered afterwards. A director who resigns relies on the policy the company holds, not one of their own.
A decision taken after the run-off period began, including one taken by whoever took over. Anything the individual already knew of when it started. Any gap between the last live policy and the run-off being put in place.
A company indemnity is only worth what the company is worth.
Most articles of association promise to stand behind a director, and most of the time the
company does. The exceptions are the cases where it matters: where the company is insolvent,
where it is the company bringing the claim, and where the law does not permit the indemnity at
all. That is what the personal section of this policy is for, and it is the section nobody
reads until they need it.
Words you’ll see
Six terms that decide whether it pays.
Side A, Side B and Side C
Three insuring clauses inside one contract. Side A answers a claim against an individual where the company cannot indemnify them. Side B reimburses the company where it has. Side C answers claims against the company itself. Which one responds decides who carries the excess and whose limit is being used up.
Wrongful act
The trigger for the whole policy. A breach of duty, a misstatement, a misleading omission, a breach of trust or a similar act by somebody acting in their capacity as a director, officer or trustee. It is deliberately wide, and it is what separates this policy from one that answers injury or damage.
Insured versus insured
Most wordings exclude a claim brought by one insured against another, so a claim by the company against its own director can fall outside the cover bought to protect them. Carve-backs are common and vary a great deal, and how wide they are is worth reading before comparing two prices.
Final adjudication, and severability
Dishonesty is excluded, but on most wordings only once a court has actually established it, so the defence is funded until then. Severability means one person’s dishonesty does not void the cover for colleagues who knew nothing about it.
Claims made
The policy answers claims brought while it is live, whatever date the decision was taken. Most business insurance works the other way round. Letting this one lapse can leave years of past decisions with no policy behind them, which is why the retroactive position matters as much as the limit.
Company indemnity
The promise in most articles of association to stand behind a director who is sued for doing the job. It is not insurance: it depends on the company being able to pay, and the law does not allow it in every case. The personal section of this policy exists for where it fails.
Why Vara
Bespoke service for you & your business,
without the big-firm minimum.
01
We establish who is actually exposed
Directors, officers, partners, trustees, and anybody running a pension scheme. Who is named, and in what capacity, decides whether a claim reaches the right section of the policy or none of them.
02
We read which side responds
Side A, Side B and Side C behave differently on excess, on limit and on who is protected when the company cannot help. Two policies quoted at the same limit are not the same protection.
03
Named insurers, not a black box
We place with a published panel and tell you who’s on it. You can see where your risk went and who’s carrying it.
04
We recommend, and we write it down
We set out cover, limits and exclusions, recommend a policy from our panel, and put in writing why we consider it meets your demands and needs, so you can check it. The decision is always yours.
You talk to a person. The machines do the typing.
Alongside this policy
The three that sit next to it.
Professional indemnity
For the work itself rather than the running of the business. A claim about advice, a design or a report belongs there, and most management liability wordings exclude professional services outright.
Commercial legal expenses
Answers the business’s employment and regulatory disputes, at a smaller limit and with a helpline condition attached. It sits alongside the employment section here rather than replacing it.
Cyber
How a breach was handled can become a claim against a director. The incident itself, and what it costs to put right, is the cyber policy rather than this one.
Free review of your management liability cover and costs.
Leave your details and we’ll call you straight back. One conversation covers the business, its directors and the decisions they take.
What the review covers
We go through the policy you have now, so you can see what it does and doesn’t cover against claims made against the company and against you personally.
We point out the terms that catch directors and officers out most often, insured-versus-insured exclusions among them, so you can check yours.
We approach insurers on our panel who write management liability cover, and come back with what they’ll offer.
We explain each option in plain English, including what it doesn’t cover.
If it’s not a risk we can place, we’ll tell you straight away rather than leave you waiting.
No obligation to switch. You decide what fits.
Rather not wait? Call us on 0333 091 3663
Good to know
Management liability questions, answered straight.
Are the directors covered personally?
What is the difference between Side A, Side B and Side C?
Doesn't the company already indemnify its directors?
How does this sit alongside a legal expenses policy?
Are fines covered?
What happens if a director is accused of dishonesty?
How does the size of the business affect this cover?
What happens to the cover if we sell the business, or a director resigns?
Vara Commercial Insurance · 0333 091 3663
Vara is a trading name of Koral AI Operating Company Limited. Vara is an appointed representative of Innovative Risk Labs Ltd, under Firm Reference Number 1060955. Innovative Risk Labs Ltd is authorised and regulated by the Financial Conduct Authority, under FRN 609155. We are registered in England and Wales under Registered Company Number 17256222. Registered office: 167-169 Great Portland Street, 5th Floor, London, W1W 5PF.