Being asked to serve on a board or to help manage a company or non-profit organization can be a very rewarding experience. Yet at the same time, the personal financial risks tied to these roles must always be recognized and minimized.

Management liability coverage – including directors and officers (D&O), employment practices liability (EPLI), and fiduciary liability insurance – exists to help protect the personal assets of leaders and senior managers, as well as the financial assets of the company against lawsuits. These specialized areas of insurance also pay for legal defense and may include provisions for the insurer to provide expert legal counsel in the case of lawsuits filed against a company and its directors and executives.

Allegations made in such claims cover a myriad of possibilities, including, among others:

• Denial or change of benefits.
• Retaliation against an employee.
• Discrimination based on religious beliefs, accommodation of disabilities, or work location preferences.
• Administrative error.
• Improper advice or counsel.
• Excessive fees charged for 401(k) or 403(b) investment plans at corporations and non-profit entities, respectively.
• Wrongful termination of, or failure to adequately fund, a benefits plan.
• Conflict of interest.
• Imprudent investment of assets or lack of investment diversity.
• Imprudent choice of insurance company, mutual fund, or third-party service provider.

While management liability coverage is commonly held among for-profit companies and non-profit organizations, it is less so among privately held companies, as concerns over cybersecurity have overshadowed this area. The risk for leaders of these privately held entities is every bit as serious, however.

Management liability coverage comes down to ensuring that the individuals in charge of running a privately held business are protected against the people-related financial risks of the organization. The professionals at Evergreen Insurance have the experience and perspective to guide a business to the proper coverage related to this topic. Contact us today to learn more.

Copyright 2025 Evergreen Insurance

Evergreen Insurance provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.