There are different types of insurance that can offer protection, chiefly Directors’ and Officers’ Insurance (D&O), which can provide funds for legal costs to fund the defence of actions, and the costs awarded to successful claimants. It’s worth noting, however, that D&O insurance will exclude costs awarded in cases of dishonesty, fraud, criminal or malicious acts committed deliberately.
A more comprehensive management liability insurance policy includes corporate legal liability (entity), and employment practices liability on top of directors’ and officers’ liability.
Corporate legal liability insurance defends claims made against the company, as opposed to against individual directors or officers.
Employment practices liability insurance protects the company against legal costs and financial loss from claims made by employees for things like unfair dismissal, discrimination or harassment.