What does management liability insurance cover?

Management liability insurance is a bundled policy that may cover claims from management decisions, employment disputes, employee theft, regulatory investigations, and tax audits, subject to policy terms. It brings several sections together under one policy, each responding to a different risk. Generally, It does not cover professional advice errors, third-party injury, or cyber incidents. Those risks are usually handled by separate policies.

For a full guide to what management liability insurance is and who it suits, see what is management liability insurance in Australia.

upcover arranges management liability insurance for eligible Australian businesses.

Coverage map

• Director personally named in a claim: D&O may respond
• Employee alleges unfair dismissal or discrimination: EPL may respond
• Employee steals money or manipulates invoices: crime/fidelity may respond
• Regulator investigates a WHS or statutory breach: statutory liability may respond
• ATO audits the business: tax audit may respond
• Company itself is named in a covered claim: corporate legal liability may respond
• Cover depends on insurer, policy wording, sections selected, limits, sub-limits, and exclusions

Directors and officers liability

May respond to claims alleging wrongful acts by directors, officers, and senior managers in managing the company, subject to policy terms. Defence costs, settlements and damages may be included, depending on the policy wording. Where the company indemnifies a director, the policy may reimburse the company.

Claim trigger: A creditor sues a director personally after alleging the company traded while insolvent.

Does not respond to: professional advice errors given to a client. That is professional indemnity.

Employment practices liability

May help cover claims involving unfair dismissal, discrimination, harassment, bullying, wrongful termination, or failure to promote, subject to policy terms. Claims can come from current, former, or prospective employees. EPL is often one of the most relevant components for SMEs with employees because workplace decisions can lead to formal claims.

Claim trigger: A former employee lodges an unfair dismissal application with the Fair Work Commission after a performance-related termination.

Does not respond to: workplace physical injury. That is workers compensation.

Crime and fidelity

May help cover direct financial loss from employee theft, fraud, embezzlement, fake invoices, or unauthorised transfers. Some policies extend to social engineering fraud, where an employee is deceived into transferring funds to a fraudulent account.

Claim trigger: An employee with supplier payment access changes bank details on an invoice and diverts company funds to a personal account.

Does not respond to: external cyber attacks without employee involvement. That is cyber insurance in most policies.

Statutory liability

May help cover defence costs and certain fines or penalties for unintentional breaches of legislation, where legally insurable. This can include WHS prosecutions, environmental breaches, and consumer protection investigations.

Claim trigger: A regulator investigates an alleged workplace safety breach. The business incurs legal defence costs responding to the investigation.

Does not respond to: deliberate criminal conduct or intentional breaches. Some fines are uninsurable by law regardless of the policy wording.

Tax audit

May help cover professional fees for accountants, registered tax agents or advisers if the business is audited by the ATO or another revenue authority, subject to policy terms.

Claim trigger: The ATO audits three years of payroll records. The business incurs accountant fees preparing and responding to the audit.

Does not respond to: the tax payable, penalties imposed, interest, or routine accounting and bookkeeping.

Corporate legal liability

May help cover the company itself when the business entity is named in a covered management claim. D&O protects individual directors. Entity cover protects the company. Availability and scope vary by insurer.

Claim trigger: A claim names both the company and its directors after an alleged governance failure.

Does not respond to: claims against individual directors only. Individual director claims fall under the D&O section.

What management liability does not usually cover

Management liability responds to management and governance risks. It does not cover every business risk.

1. Professional advice or service errors. Usually handled by professional indemnity insurance.
2. Third-party bodily injury or property damage. Usually handled by public liability insurance.
3. Employee workplace injuries. Generally handled through workers compensation schemes.
4. Cyber incidents. Usually handled by cyber insurance.
5. Known claims before the policy started. Usually excluded.
6. Deliberate or fraudulent acts by the insured. Usually excluded.
7. Insolvency-related claims. Some policies limit or exclude claims where director conduct contributed to insolvency.
8. Insured-vs-insured claims. Some policies exclude claims between directors, or between the company and its own officers. For more detail, see insured vs insured exclusion explained.

Claims-made: the one thing to understand

Management liability policies generally operate on a claims-made basis. The policy in force when the claim is first made is usually the policy that responds, subject to policy terms. For example, if a director made a decision in 2024 and a claim is lodged in 2026, the 2026 policy responds, not the 2024 policy.

Gaps between policies, late notification, or known circumstances before the policy starts can affect cover. Run-off cover may also be relevant when directors leave, the business is sold, or the company stops trading.

Which sections may be relevant for your business

• Business with directors or officers. D&O and corporate legal liability may be relevant.
• Business with employees. EPL may be relevant.
• Staff handling money or payments. Crime cover may be relevant.
• Regulated industry or WHS exposure. Statutory liability may be relevant.
• Concerned about ATO audit costs. Tax audit cover may be relevant.
• Co-directors or shareholders. Insured-vs-insured exclusions may be worth reviewing.

For pricing by business structure, see management liability insurance cost in Australia.

What you need for a quote & how upcover can help

You are usually asked for your ABN, business structure, industry, annual turnover, number of employees, number of directors or officers, selected sections, preferred limit, claims history, and whether the business has prior disputes, investigations, or insolvency concerns.

upcover arranges management liability insurance for eligible Australian businesses with selected insurers and underwriters. Depending on the insurer and policy, cover may include D&O, EPL, crime, statutory liability, tax audit, and corporate legal liability.

• 70,000+ businesses covered across Australia.
• 4.9/5 customer rating.
• 80+ insurance partners.
• Instant Certificate of Currency on policy confirmation, where available for the relevant policy.

For related guides, see what is management liability insurance, management liability insurance cost, and management liability vs D&O insurance.

upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078.

Frequently asked questions

What does management liability insurance cover?

Management liability is a bundled policy with up to six sections: D&O, EPL, crime, statutory liability, tax audit, and corporate legal liability. Each section responds to a different management risk. The sections available depend on the insurer and policy.

Does management liability include D&O cover?

D&O is commonly a core component. It may cover directors and officers for claims alleging wrongful acts in managing the company, subject to policy terms.

Does management liability cover unfair dismissal?

The EPL section may respond to unfair dismissal claims from current, former, or prospective employees.

Does management liability cover employee theft?

The crime or fidelity section may respond to direct financial loss from employee theft, fraud, or dishonest acts.

Does management liability cover fines and penalties?

The statutory liability section may cover certain fines and penalties for unintentional breaches of legislation, where legally insurable. Deliberate breaches and criminal conduct are excluded.

Does management liability cover tax audits?

The tax audit section may help cover professional fees for accountants or tax agents if the business is audited by the ATO, subject to policy terms. It does not usually cover tax owed, penalties, interest, or routine accounting.

Does management liability cover professional advice errors?

No. Professional advice or service errors are usually handled by professional indemnity insurance. Management liability covers management and governance risks.

What is not covered by management liability insurance?

Management liability does not usually cover professional advice errors, public liability claims, employee workplace injuries, cyber incidents, property damage, known claims, deliberate misconduct, or some insured-vs-insured claims. Separate policies may be needed.

How do I arrange management liability insurance?

You are usually asked for your ABN, industry, turnover, employee and director numbers, selected sections, preferred cover limit, and claims history. upcover arranges management liability insurance for eligible Australian businesses.

Is management liability the same as D&O insurance?

No. D&O is commonly one section of a management liability policy. Management liability may also include EPL, crime, statutory liability, tax audit, and corporate legal liability, depending on the insurer and policy.

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_{The information in this article is general in nature and provided for informational purposes only. It does not constitute personal insurance, financial, or business advice. Cover sections, limits, sub-limits, and exclusions vary between insurers and policies. Always read the relevant Product Disclosure Statement before purchasing. Before deciding whether a particular insurance product is right for you, consider your circumstances. All insurance products arranged through upcover are subject to the terms, conditions, limits and exclusions in the relevant PDS. upcover Pty Ltd ABN 17 628 197 437, CAR 1299211 of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078.}