What Does a Management Liability Policy Cover?
As a business owner or executive in Washington state, your leadership decisions carry real legal risk. That’s why having the right insurance coverage—especially a Management Liability Insurance policy—is critical. At Hood Insurance Agency, based in Lynnwood, WA, we help business owners throughout the state protect their companies and leadership teams from lawsuits that stem from managing a business. Here’s what a Management Liability policy typically covers—and why it matters for Washington businesses.
Key Coverages Included in a Management Liability Insurance Policy
1. Directors and Officers Liability (D&O Insurance)
What it covers:
D&O insurance protects business leaders—owners, directors, officers—when they’re sued for decisions made while running the business. Claims often involve mismanagement, breach of fiduciary duty, or failure to comply with regulations.
Who files these claims?
Employees, investors, customers, competitors, or even state regulators.
Why WA businesses need it:
Washington state has active regulatory oversight and employment protections. D&O insurance in WA is crucial to shield individual leaders from personal financial exposure.
2. Employment Practices Liability (EPL Insurance in WA)
What it covers:
EPL insurance protects your business from lawsuits involving wrongful termination, discrimination, sexual harassment, retaliation, or failure to hire or promote.
Who sues?
Employees, former employees, or job applicants.
Why this matters in Washington:
WA has some of the country’s most employee-friendly laws. Even a single claim can result in legal fees and settlements in the tens or hundreds of thousands. EPL coverage is essential protection.
3. Fiduciary Liability Insurance
What it covers:
Claims alleging mismanagement of employee benefits, like 401(k) plans, pensions, or health benefits.
Who brings these claims?
Plan participants, beneficiaries, or government agencies like the Department of Labor.
Relevance in WA:
If you manage retirement or health plans for your team, you carry fiduciary responsibility under ERISA. This coverage protects against claims of negligence, even if unintentional.
4. Crime Coverage / Employee Dishonesty (Optional Add-On)
What it covers:
Losses caused by theft, fraud, embezzlement, or forgery—either by employees or third parties.
Washington business risk:
Smaller and mid-sized businesses are often hit hardest by internal theft. Crime coverage gives you a financial backstop.
5. Third-Party Discrimination Coverage
What it covers:
Claims of harassment or discrimination made by
non-employees—vendors, customers, or partners.
Good fit for:
Retailers, hospitality businesses, contractors, or any company that interacts directly with the public.
Why Washington Businesses Need Management Liability Insurance
Most general liability and professional liability policies don’t cover these kinds of claims. If you run a business in Washington—especially if you have employees, a board of directors, or handle benefit plans—you need protection tailored to management risks.
Based in Lynnwood, WA – Serving All of Washington
At Hood Insurance Agency, we specialize in management liability insurance for Washington businesses. From startups and nonprofits to established companies, we help tailor protection for business owners, executives, and HR teams across the state. We’re located right here in Lynnwood, WA, and we understand the unique legal and regulatory climate Washington businesses face.
How Hood Insurance Agency Can Help With Your Business Insurance Policy
Need a quote or policy review? Want to find out if your current D&O, EPL, or fiduciary coverage has gaps? Call Hood Insurance Agency in Lynnwood at 425-689-5855 or request a quote online. We’ll help you make sure your leadership team—and your business—are protected from the risks that matter most.