Management Liability

In a culture of increasing blame-seeking, Hong Kong is seeing more litigation against private companies and the individuals who run them. If a company is accused of misconduct, directors and officers can be held personally liable. As a result, their personal assets are on the line – whether the mistake was theirs or not.

Howden’s Management Liability insurance is a portfolio policy designed to protect companies and their directors against the most common legal threats they face. These are Directors’ and Officers’ Liability, Employers’ Liability, and Crime insurance.

Management Liability offers comprehensive protection in the event of litigation. It protects a business’ decision-makers from the financial cost of a lawsuit, including:

• Fees for legal representation
• Damages and claimants’ costs
• Reputation management

Policy benefits

Our policy covers:

• Damages awarded as a result of mismanagement
• Defence costs and related legal expenses
• Costs and expenses for official investigations and enquiries

Key policy exclusions

Our Management Liability policy does not cover the following:

• Any criminal act
• Breaches of professional duty
• Ongoing litigation before policy inception
• Bodily injury and property damage

Common myths

I have faithfully run my business for years and have done nothing wrong. 

Avoiding committing wrongdoing won't necessarily stop someone from accusing you of doing something wrong. Aggrieved parties initiate legal action for a number of reasons - and directors can be taken to court over the actions of their colleagues. You may still end up in a lawsuit, even if you never make a single mistake.

We are a small company. Only public listed companies need Management Liability insurance.

The Companies Ordinance imposes the same standard of care on directors of all companies, regardless of whether they are privately held or listed.

People sue companies, not individuals.

It might be a company that is taken to court, but it is the responsible individuals within that company who have to stand trial. Companies are limited by shares. The directors can be named as co-defendants in the same proceedings, putting their personal assets at risk.