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Corporate Legal Liability Insurance
Corporate legal liability insurance (CLL) is purchased as part of a management liability insurance package, which includes directors’ and officers’ (D&O) insurance. CLL insurance can only be purchased with D&O and not as a standalone policy. CCL cover is also known as ‘entity insurance’.
CLL offers protection to the company and provides the funds to defend claims made against your company for a wide range of alleged wrongdoings and any associated settlements or awards.
CLL covers:
- Costs incurred while investigating claims
- Legal expenses incurred in defending a claim
- Awards or settlements paid
Corporate legal liability insurance could be the difference between your company surviving, or not surviving, a legal claim.
The Alan Boswell Group Difference
D&O Insurance is a complex subject with many options available. We will take the time to identify your needs for this and other relevant insurance products to make sure you’re fully covered. Directors and Officers Insurance is essential for many companies as it protects individuals in the event of legal action.
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Always work hard to find us the right policies for a business area that is difficult to accommodate in the usual markets
Corporate Legal Liability Insurance in detail
Corporate legal liability is essentially the liability a company may face for actions taken by the company itself, or its employees, that could be deemed unlawful. It can also refer to a lack of action – where the action was required to comply with the law.
A company would be found liable if these actions (or lack of action) were:
- due to a lack of responsible management
- a result of negligence
- performed for the company benefit
In these circumstances the company may be prosecuted.
Corporate legal liability insurance (CLL) can be used to not only defend these claims, but also cover the cost of investigations and any awards or settlements incurred.
A lot of private businesses are owner managed. Directors and Shareholders are often the same. Consequently a loss to the Company might also be an indirect loss to the Directors. This is one of the main reasons why it goes hand in hand with Directors’ & Officers’ cover.
Often claims will be made against the company and the company directors. This may be because the claimants are not sure who to blame. CLL works alongside Directors’ & Officers’ insurance as part of a wider Management Liability policy, to offer companies, their directors, and employees with essential protection from claims made against them for perceived wrongdoings.
What does Corporate Legal Liability Insurance cover?
Corporate Legal Liability covers the costs associated with defending claims made against your company for a range of alleged wrongdoings such as:
- Breach of duty including fiduciary or statutory duty
- Breach of trust
- Negligence, negligent misstatement, misleading statement or negligent misrepresentation
- Breach of warranty and authority
Policies generally include:
- Flexible limits of indemnity from £250,000 upwards
- Official investigation costs
- Regulatory actions
- Operation and administration of any pension or employee benefit scheme
- Employee dishonesty
- Defence costs for contractual liability disputes
- Infringement of copyright
- UK legal pursuits
- Third-party fund transfer
- Defence costs for cyber liability
It is important to note that corporate legal liability insurance provides indemnity for the company and NOT any named individual. With directors subject to unlimited personal liability it is important to have an appropriate management liability policy in place.
Please note that this cover is not normally available for public companies as there is a divorce between ownership and control.
FAQs
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Corporate legal liability insurance is not legally required, although for many companies it would be considered best practice.
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There will be a limit to the cover an insurance company is prepared to provide, however there are different options for the level of cover you may wish to purchase. Generally speaking, limits are linked to turnover and based on historical claims data to ensure cover is appropriate.
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Contact us. We sometimes find policyholders hold off notifying because there hasn’t been a formal ‘claim’. Our advice is to engage with insurers as soon as you become aware as a situation could escalate to a claim. This is both to comply with policy conditions but also because insurers may be able to offer advice and support.
Get in touch
Andrew Wright
Account Executive
Andrew joined the insurance industry after completing college and hasn’t looked back since. Having joined Alan Boswell Group in 2003 as a Claims Handler, he…
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