17 May 2018

Insurance Scenario - Management Liability Policy

Penny receives an invoice for payment of over $5,000 for new equipment. Why does Penny need to have this invoice approved by management/board prior to payment? A. Dual signatories are a requirement of the Management Liability Policy
B. Penny doesn’t need to have it approved as it is an extra step and will take too long
C. The board/management are happy to allow Penny to sign off on all invoices without approval as she has been in her role for many years and she is trusted
Answer: A - It is important that no one employee can control a financial transition from commencement to completion. This si to protect the club from potential acts of fraud and is a good mitigation process.

The Management Liability Policy may not cover if a dual approval process is not documented and in place at the club.