Management Liability Insurance is a policy designed to protect business owners, directors, officers, and managers from the financial risks that come with running and managing a company. It typically includes Employment Practices Liability, Directors and Officers Liability, Statutory Liability, and Crime cover bundled in a single policy. It covers the cost of defending and settling claims, including legal fees, damages, and some fines and penalties.

Employment Practices Liability insurance covers claims brought by employees against an employer for employment-related matters including allegations of wrongful dismissal, workplace bullying, harassment, and discrimination. Claims can be brought by current, past, or prospective employees, whether full-time, part-time, or casual. The policy typically covers legal defence costs, damages, and settlement costs up to the policy limit.

Psychosocial hazards are aspects of the work environment including how work is designed, managed, and how people interact that can cause psychological or physical harm. Examples include excessive workloads, bullying, harassment, poor management practices, and lack of role clarity. As of December 2025, every Australian state and territory now requires employers to proactively identify and manage psychosocial hazards under WHS legislation. Penalties for failing to do so can be severe.

A Management Liability policy can respond to claims arising from psychosocial hazards in the workplace – for example, where an employee alleges psychological harm caused by bullying, harassment, or poor management practices. The Employment Practices Liability section may cover defence costs and compensation in these scenarios, subject to policy terms, conditions, and exclusions. It is not a substitute for your obligations under WHS legislation, but it can provide a financial safety net if a claim is made against you.

Any Australian business with employees, particularly small and medium enterprises, should consider Management Liability Insurance. Smaller businesses often lack dedicated HR or legal teams, which can make them more exposed when employment claims arise. If your business has directors, managers, or staff who make decisions that affect other people, this cover is worth discussing.

Management Liability Insurance does not cover wage underpayments or unpaid employee entitlements such as superannuation or redundancy payments – employers remain legally responsible for these. It also does not replace your obligations under Work Health and Safety legislation. Specific exclusions vary by policy, which is why it is important to review the fine print with an experienced broker.

Cost depends on your business size, the number of employees, the cover options you select, and your industry. As an independent broker, Dudgeon Berry Insurance Group can access a range of insurers and policies to find cover that suits your business and budget. Contact us for a personalised quote.