Is it covered? Legal scenarios where Management Liability cover stepped up

Buying a Management Liability Policy (MLP) is not just about safeguarding against the significant financial losses that can result from a tribunal or court award. A policy like this can also help prevent claims from progressing as far as a court by providing expert legal advice that enables a business to assess how to handle allegations or situations proficiently and in the best legal way.

This more productive approach deals with many issues to avoid constructing a legal defence, which can be a significant drain on the business and a waste of management time. Access to top-level legal advice and online resources is a good way to address legal or regulator-related risks.

But what would be covered? For instance, would an MLP policy pick up the cost of legal representation if a fleet-based business were sued by a driver whom it had dismissed due to the discovery of a serious medical condition, despite both the Driver Vehicle and Licensing Agency (DVLA) and their doctor declaring them fit to drive? The answer is ‘yes’ in a real case, but the potential claim was a £75,000 award, as there was little or no defence by the time the legal team was advised of the situation. The failure to alert them also meant the insured had to pay a £10,000 excess.

If a business suffers a fatality at work, it is not necessarily the case that a police or HSE prosecution will result. Quickly alerting the MLP policy insurer can allow the associated legal team to present a case during the investigation stage by providing evidence of risk management measures. It can also allow the company to handle the publicity around the incident efficiently and effectively, as well as work with crisis management experts.

Other aspects covered by such a policy might relate to data. One case involved a company providing what was alleged to be a defective response to a subject access request. Anyone has the right to make such a request to assess what personal information is being held on file about them, and these requests are increasingly being used as a fishing exercise to obtain data for other cases.

It is easy to mishandle them, but the consequences can be serious. In the actual case that arose, the business utilised the legal services provided by its MLP policy for the trial preparation, and thanks to the policy legal team’s involvement, the case was withdrawn.

With 96 regulators and a vast amount of employment law to navigate, it makes sense to buy a policy that provides legal expertise and access to other professionals who can assist with crisis situations. To get this valuable cover in place, speak to L Wood Insurance Brokers on 01274 515747 today.