Understanding Your Options
Directors and officers insurance, commonly known as D&O insurance, protects individual directors and officers against certain claims arising from decisions they make in their roles.
Management liability insurance can provide broader protection, covering directors and officers as well as the company itself, and is commonly structured as a bundled policy for private companies and SMEs.
While the two types of insurance can overlap, they are not the same. The right cover depends on your business structure, responsibilities, exposures and the types of claims you may face.
Barrack Broking arranges both management liability and D&O insurance for Australian companies, helping businesses assess their risks and put appropriate cover in place. A Barrack Broking director oversees each client matter, providing experienced guidance throughout the process.
Need to review your cover? Talk to our experts at Barrack Broking about your business’s risks and insurance options.
Management Liability vs D&O Insurance: Key Differences
D&O insurance is one part of a management liability policy, not a rival to it. Management liability packages D&O with additional covers for the company entity and its wider risks.
| Management Liability | Directors & Officers (D&O) | |
| Who is insured | Directors, officers and the company, often with additional business covers. | Primarily directors and officers facing claims arising from management decisions. |
| Typical buyer | Private companies, SMEs and not-for-profits. | Larger, listed or complex companies needing dedicated D&O cover. |
| What is bundled | Can bundle D&O, employment practices liability, crime, statutory liability and tax audit insurance. | Focuses on directors and officers liability. |
| Securities claims | May be available but are generally less central for private companies. | More relevant to listed companies. |
What Is Management Liability Insurance?
Management liability insurance is a packaged policy for private companies that can cover directors, officers, and the company itself for claims arising from how the business is managed.
It commonly includes:
- D&O cover
- Company entity cover
- Employment practices liability
- Crime cover for employee theft and fraud
- Statutory liability
- Tax audit costs
Employment practices liability can respond to certain employment-related claims, including an unfair dismissal application lodged with the Fair Work Commission. Employees generally have 21 days from when the dismissal takes effect to lodge an application.
What Is Directors & Officers (D&O) Insurance?
Directors and officers insurance protects the personal assets of directors and officers when they face claims alleging wrongful acts in running a company. It can cover personal liability and defence costs where a company’s directors or officers are not protected by the company itself.
D&O policies are divided into Side A, B and C to show who the cover responds to and in what circumstances:
| Side | What it covers |
| Side A | Pays the director or officer when the company cannot indemnify them for a covered claim, protecting their personal assets. |
| Side B | Reimburses the company when it indemnifies its directors or officers for a covered claim. |
| Side C | Covers the company entity for certain securities claims and is mainly relevant to listed companies. |
Which One Does Your Business Need?
Choose Management Liability if you are:
- A private company, SME or family business
- A not-for-profit wanting broader protection
- A business with directors and employees, such as a real estate agency or accounting practice
- Looking for one policy covering directors, the company and employment risks
- An accounting firm looking for insurance for accountants
Choose standalone D&O if you are:
- A listed company
- Raising capital
- A larger or more complex organisation
- Looking for dedicated D&O coverage that is not reduced by employment or crime claims
- Managing significant securities risks
Get the Right Cover Today
Barrack Broking provides management liability and directors & officers insurance advice to businesses across Australia.
We’ll help you understand your management risks and arrange cover suited to your business. Don’t wait for a claim to find out that your policy doesn’t provide the protection you expected.
Ready to review your management liability or D&O cover? Talk to one of our specialist insurance brokers today.
Frequently Asked Questions
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Is management liability the same thing as D&O?
No. D&O is one section of a management liability policy, which can also include employment practices, crime, statutory liability and tax audit cover.
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What does directors and officers insurance cover?
D&O insurance can cover defence costs, damages, and settlements arising from claims against individual directors and officers. Side A protects individuals, Side B reimburses the company, and Side C can cover the company for certain securities claims.
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When should you consider D&O insurance?
Consider D&O insurance when appointing outside directors, taking on investors, preparing to list, or when the board wants a dedicated D&O limit.