With the abundance of lawsuits being brought against companies for various reasons, the legal landscape may be precarious to navigate through. Employees in managerial positions may find themselves in a tight spot when their company becomes the defendant in a lawsuit, so having a good management liability policy may be one of the best ways to protect both the company and the company official.
Why Do Managers Need Liability Insurance?
Although many clients may file claims against a company due to negligent service, many employees may file claims against managers. There may be many reasons for this, but several of them are listed below.
- Conflicts of interest
- Release of confidential information
- Unfair business practices
Companies may need to protect their managers in case fraudulent claims are made. A good policy may prevent the company from paying legal fees when a suit is filed against them.
How Does Insurance Protect Company Officials?
While a management liability policy may not guarantee that a claim will not be filed, it may prevent the company from paying. A good insurance company may cover legal fees if the claim is deemed fraudulent, or it may cover restitution costs if the company or manager is at fault. Choosing a comprehensive policy may be a way to protect both the company and managers.