Management Liability Insurance / Directors & Officers Liability Insurance

Policies

Directors & Officers Liability Insurance Policies

Directors & Officers Liability Insurance provides protection for the personal assets of directors and officers by providing indemnity for loss arising from a claim as a result of a 'wrongful act' committed by them in the course of conducting their business.

All Company Directors and Officers have an exposure to potential claims and legal action regardless of their company's size and business activities. Corporate governance and regulatory surveillance places immense accountability and pressure on business and company directors and officers to perform their duties thoroughly.

Types of Exposures to Claims

Claims can arise from many sources and include:

• Breach (alleged or actual) of the Trade Practices/Fair Trading Legislation

• Enquiries by regulatory authorities (e.g. ASIC, ATO, ACCC)

• Breach of Contract

• Shareholder disputes

• Defamation

• Competitors

• Creditors

Insurance Protection

Directors and Officers Insurance aims to provide protection for:

• Loss arising from a ‘Wrongful Act’ committed by them in the course of conducting their business;

• Settlements, compensation and/or damages awarded against them; and

• Legal costs and other expenses associated with defending a claim.

The definition of a ‘Wrongful Act’ varies from one insurance company to another. However it is commonly defined as any misstatement, misleading statement, omission, an actual or alleged breach of duty committed, alleged to be committed or attempted by or any other matter claimed against any insured person, individually or collective as an insured person whilst acting in their capacity.

Management Liability Insurance Policies

Management Liability Insurance is a comprehensive insurance product that has been designed specifically for private companies and their directors and officers. It combines Directors and Officers Liability Insurance with several other policies, to provide a broad range of cover for management under the one policy.

Management Liability - Policy Features

Management Liability Insurance is able to provide protection for:

• Directors and Officers Liability Insurance

• Employment Practices Liability Insurance

• Fidelity Guarantee Insurance

• Superannuation Trustees Liability Insurance

• Crisis cover insurance

• Defense costs

• Official investigation and enquiries costs

• Occupational Health and Safety

• Defense/investigation costs

Directors & Officers / Management Liability Insurance QuoteTo obtain a quotation, enquire online at www.it.optimuminsurance.com.au.

In most circumstances we are able to provide an quote over the phone. If you would like to discuss your needs further, contact us on 1300 739 861.

Policy coverage is always subject to the terms, conditions and exclusions of the insurance contract and policy wording provided by the insurer.

Each insurance company has its own policy wording. This means that coverage can vary considerably from one insurer to another. It is vital that you compare each policy based on the appropriateness of cover for your individual or business needs.

As Insurance Advisers, it is our role to understand the terms and conditions, so contact us now for advice and a quote.

Frequently Asked Questions

Claims Made Policies

The following types of insurance are commonly termed "Claims Made" Contracts of insurance:

• Professional Indemnity Insurance

• Association / Non-Profit Liability Insurance

• Directors and Officers Liability Insurance

• Management Liability Insurance

• Employment Practices Liability Insurance

• Fidelity Insurance

What is a Claims Made Contract?

"Claims Made” policies only cover claims made or "Known Circumstances" that you become aware could reasonably be expected to give rise to a claim that arise during the period of insurance. Acts or omissions may have occurred in a prior period and, as long as the act or omission, was after the retro-active date, the policy will extend to those prior acts.

It is essential to maintain continuity of insurance cover (no gaps in the period of cover) as claims made against you or circumstances of which you become aware could give rise to a claim, will not be covered if they are not disclosed within the period of insurance where they first arise.

If there is any claim or potential claim or even a circumstance that could reasonably be expected to give rise to a claim, it should be reported to your insurer immediately it is known, regardless of your own view as to fault. If you know of a claim or circumstance and it is not reported within the insurance period in which it arises your insurance policy is unlikely to respond.

What is a Known Circumstance?

A 'Known Circumstance' could be defined as any fact, situation or circumstance, which a reasonable person in the insured’s professional position would have thought, might result in someone making a claim against him/her. Therefore if a claim arises after the inception date of the policy from a fact, situation or circumstance that the insured knew or should have known, at the time of the commencement of the policy that might give rise to a claim, it would normally be excluded as it arose from a Known Circumstance.

Why is Notifying all Known Circumstances Important?

By notifying all circumstances that might give rise to a claim, during a policy period, an insured can get the benefit of their statutory rights under Section 40(3) of the Insurance Contracts Act 1984 (the Act). Section 40(3) provides an insured with statutory rights to notify a circumstance or insured, to an insurer, during the currency of the policy.

If a claim eventuates against an insured from the notified circumstances, then the insurer cannot deny indemnity, despite the fact that the claim arose outside the period of insurance. Therefore, any fact, situation or circumstance, which a reasonable person in the insured's professional position would have thought might result in someone making a claim against them, should be notified to their current insurer.

Changing from One Insurer to Another (Notification of Known Circumstances)

If you change insurers, you will need to notify your insurer of every conceivable circumstance before the expiry date of your policy. If this is not done, and if a claim was to occur in the future from a circumstance not previously notified, you may be left uninsured, with neither the previous or the current insurer accepting liability for the claim. The prior insurer may deny the claim as the insured failed to notify the circumstance or claim during the period of insurance.

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Presentation Disclaimer –– “This material contains general information only and may not suit your

particular circumstances. To decide if a policy is right for you please carefully read the relevant Product

Disclosure Statement (PDS) and/or Policy wording. A copy of the PDS or policy wording is available by

contacting our office on 1300 739 861;”

Disclosure Statement – “Optimum Insurance Services Pty Ltd is a Corporate Authorised

Representative of Insurance Advisernet Australia Pty Ltd (Car No. 291220), Australian Financial Services

Licence No 240549, ABN 15 003 886 687.”