Lockton’s London-based International Management Liability (IML) team specialises in flexible, targeted insurance and risk management solutions for senior business executives. Backed by unrivalled expertise and strong international insurer relationships, our dedicated team currently places approximately 1,000 financial lines policies for 500 commercial clients.
Your ideal Management Liability partner
When it comes to Management Liability insurance, you need a partner who can deliver flexible, made-to-measure protection for your business and your senior employees. When you choose Lockton as your risk and insurance adviser, you gain access to a dedicated specialist team with a wealth of experience and strong insurer relationships. You'll also benefit from our extensive servicing capabilities around the world. You’ll be in good company. We work with clients of all types and sizes, from established corporations with complex multinational needs, to innovative start-ups with a thirst to grow.
Tailored solutions for your precise needs
Your directors, officers and senior managers can count on us for effective D&O insurance protection and practical help navigating today’s increasingly stringent regulatory environment. With us, you can be sure of a Management Liability insurance programme that’s tailored to fit your risk exposures as they evolve. Lockton is privately owned, with no external stakeholders to please, so we can focus fully on your needs, whilst delivering industry-leading service.
What we bring to your business:
- Bespoke advice on the implications of any scenario, based on extensive first-hand experience across a huge range of risks
- Our strong relationships with key insurers, mean we can get you the best possible terms - and quickly resolve any coverage or claims issues
- Exclusive coverage forms for D&O and Commercial Crime insurance tailored to your individual needs, with broad coverage and limited exclusions
Our core offering
Directors and Officers (D&O) liability insurance
D&O insurance protects directors, officers and other senior employees against costs arising from claims made against them in relation to acts they are alleged to have committed while acting in their official capacities - typically resulting from an error, omission, or breach of duty.
The cover provided by a D&O policy can be broken down into three sides:
Side A covers losses sustained by Insured Persons where they have not been indemnified by the company. Typically, no retention applies to these claims
Side B covers the company where it has indemnified an Insured Person. This is a balance sheet loss, so a policy retention will apply
Side C covers the company itself where claims are brought against it, but only for securities claims.
Find out more here.
Run-off D&O insurance
Run-off is an extension to a D&O liability policy. It provides the board with dedicated limits of liability for future claims arising from wrongful acts that occur prior to the effective date of, for example, a change of control. Terms are generally provided for a three-to-six-year period beyond the change in control, and are finalised to match the statute-of-limitation period during which claims can be brought.
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Commercial Crime
Commercial Crime policies cover a policyholder’s direct financial loss as a result of the theft of money, property, or securities that belong to the company or are in the company’s custody or control. They cover both internal and external threats, including impersonation fraud, social engineering, and embezzlement. They can also cover expenses related to proving a crime loss.
Find out more here.
Employment Practices Liability (EPL)
Employment Practices Liability insurance protects a company, its managers, and its employees against the financial risk that results from employment-related claims. EPL insurance can respond to allegations of, for example, harassment or sexual harassment, emotional distress, discrimination, negligence, refusal of promotion, or unfair dismissal. Along with defence costs, an EPL policy can also cover fees, expenses, and compensation awards, including punitive damages (where insurable by law) that arise from alleged or actual wrongful employment acts.
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Pension Trustee Liability (PTL) and Pensions Discontinuance Cover
Pension Trustee Liability insurance covers losses arising from claims alleging a breach of trust, duty, or statutory provision, along with negligence, administration errors, wrongful omissions, misstatements, and misleading statements. A PTL policy will pay defence costs, judgements, costs of legal representation in fact-finding investigations, settlements, awards, and damages.
At wind-up following a buy-in and buy-out of a pension scheme, Pensions Discontinuance/Run-off is regularly considered. This protects trustees, corporate trustees, and employees of the sponsoring employer acting on behalf of the pension scheme against future liabilities arising from a claim made against them during the policy period that relates to actions they took on behalf of the scheme. Given that there is unlikely to be an indemnity available from the sponsoring employer company in the future, this type of cover is vitally important. These policies can also cover overlooked beneficiary costs, typically on a sub-limited basis.
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Management Liability Insurance
Management Liability insurance policies are available to privately owned companies with assets/revenues below specific thresholds. They go beyond the core cover provided by a typical D&O insurance policy by including Corporate Legal Liability, Employment Practices Liability, Pension Trustee Liability, and Crime modules.
Public Offering of Securities Insurance (POSI)
Public Offering of Securities Insurance covers liabilities arising from the prospectus and the offering itself, including the roadshow. Unlike a D&O policy, a POSI policy is a single-purchase product that lasts for the duration of the liability period - usually determined by the statute of limitations in the applicable jurisdiction. Cover can be provided for the following exposures:
Civil and criminal liabilities arising from negotiations or decisions made in connection with the offering, including the road show
Advancement of defence costs
Pre-wrongful-act full-limit coverage for investigations
Cover for preliminary prospectuses, including pathfinder documents
Cover for any liability arising from warranties owned by the company or its directors made in the underwriting agreement
Cover can be extended to include selling and/or controlling shareholders’ liabilities
Claims for misrepresentation in the lead-up to the offering (i.e. negotiations, decisions, discussions and presentations (e.g. the road show)
Meet our client team
Meeting your needs is our priority. To make sure we can always do this, we have an experienced team of dedicated experts in London, Manchester, and Bristol, who you can rely on for consistently outstanding service and advice.
Meet our teamOur latest Management Liability Insights
Management Liability FAQs
What exposures do Directors and Officers face?
Directors and Officers face personal liability if they are alleged to have failed in their duties that come with their role. The claimant could be any stakeholder in the business: a shareholder, a regulator, an employee, a supplier, a creditor or a customer. Common allegations include misstatements, misleading statements, and failure to implement controls and procedures that could have prevented an incident from occurring.
What is Directors and Officers (D&O) Insurance?
D&O Insurance protects the personal assets of directors and officers when a claim is made against them for something they have done, or failed to do, in their official capacity. It covers the cost of defending a claim, as well as providing protection for settlements, awards and damages, fines and penalties (to the extent these are insurable by law).
If you have been left without the protection of your company, a D&O policy will reimburse you directly. Where your company has provided you with an indemnity, the policy will reimburse the company for its balance sheet loss.
What are the most common types of D&O claim?
Common claims include matters related to:
Health and safety
‘ESG’, including heightened focus on environmental policies and procedures, as well as supply chain diligence
Cyber security and data breaches
Misstatements, misleading statements or restatements of financial reports
Allegations of failure to prevent bribery and corruption
Insolvency-related matters, including wrongful trading
Employment related claims
As governments across the world continue to tighten regulatory oversight, alongside society focus on the accountability of individuals & piercing the corporate veil, the number of claims made against directors and the cost to defend such action continue to increase.
Why do I need D&O Insurance?
If you are a director of any business, you should insist on D&O insurance protection, to protect your personal assets.
Regardless of size, all companies appoint board directors and are therefore exposed to D&O claims. Where management teams are making decisions that affect stakeholders, we would strongly recommend taking out D&O cover as a core protection for the business and its leaders. Unless companies have suitable protections in place, they may struggle to attract and retain C-suite talent.
The risk of a D&O claims increases when companies are large, publicly listed, operating in more than one country, heavily regulated, or at risk of insolvency.
My company provides me with an indemnity. Do I still need D&O Insurance?
Companies often provide their directors with an indemnification agreement. But it’s important to be aware that this might not always apply, for example when:
The company itself brings a claim against you
Insolvency means there are no corporate funds to provide the protection
Indemnification is legally prohibited.
Let’s talk
If you would like to know more about how our Management Liability team can help you or your business, contact us using the form below, and we’ll be in touch soon.
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