Industries Industry & Commerce Insurance Policies Leadership & Responsibility Manager Liability D&O Liability for Financial Losses

Management of junior staff: What protection is needed?

The liability risks for young managers at any career level are different.

All employees, both with and without management functions, such as authorized signatories, are subject to the liability privilege of hazardous work, which was developed by labor court rulings. In the event of a claim, liability for negligence is limited to three months' salary and, in the case of gross negligence, to a maximum of one year's salary. This liability privilege applies equally to employees without management functions and to senior managers (with or without power of attorney). Provided that the company has taken out D&O insurance, however, they are automatically covered and do not have to worry about personal liability.

D&O insurance of the company

When moving up to the management or supervisory board, care should be taken, because from the conclusion of the contract, the person has unlimited liability with their own private assets and is thus exposed to a completely different liability situation. Therefore, it is highly recommended to make sure before signing the new employment contract that insurance coverage is also provided in these positions through the company's D&O insurance.

Private insurance for managers

It is also advisable to look into the options for private insurance. Young managing directors who for the first time receive a salary that exceeds the statutory contribution assessment ceiling should also find out about switching to private (supplementary) health insurance. Furthermore, private products in the form of a top manager legal expenses insurance, which includes additional coverage in the areas of labor law, criminal law and property loss protection, are recommended – especially if you are not clear in detail about how the company is covered in the area of D&O insurance. All employees with a company car should also consider adding driver legal expenses insurance to their private coverage when they receive a company car.

Additional pension solutions

The working generation is also increasingly focusing on their own retirement planning, which fundamentally has very different requirements than the boomer generation currently still in the labor market. The younger generation, for example, places a great deal of value on flexible working hours and locations; our customers often tell us that their employees want to be able to work abroad for up to three months a year. To ensure optimal coverage for such models, it makes sense to take out additional travel health insurance and baggage insurance.

If companies are inflexible in their approach to such ideas, it will be difficult to keep the next generation on board. Businesses face numerous challenges – including adapting to the next generation in a unique way and offering them an attractive working environment that is different from that of previous generations.