Do I need corporate legal liability insurance?

Corporate legal liability insurance is not legally required, although for many companies it would be considered best practice.

Is there a limit to the cover I can purchase?

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.

What should I do if I’m made aware of an issue?

Contact us. We sometimes find policyholders hold off notifying us 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.

Corporate Legal Liability Insurance

Name: Corporate Legal Liability Insurance (CLL)
Brand: Alan Boswell Group
Rating: 4.8 (11324 reviews)

Corporate Legal Liability Insurance (CLL)

CLL offers protection to the company and provides the funds to defend claims made for a wide range of alleged wrongdoings and any associated settlements or awards.

Costs incurred while investigating claims

Legal expenses incurred in defending a claim

Awards or settlements paid

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. CLL 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.

The Alan Boswell Group Difference

Corporate legal liability 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.

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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 insurance 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.