By Graham Slater, Martial Arts Australia Founder & Industry Insurance Specialist

After decades advising martial arts schools and gyms, I’ve learned that most owners spend plenty of time worrying about student injuries — but very little time thinking about the risks created behind the scenes. Management Liability is the missing shield, protecting the people who run the business when internal problems strike. And as your gym or dojo grows, those risks grow with you.

Below is a clear, practical FAQ-style guide to help martial arts and fitness operators understand what Management Liability actually does, why it matters, and how it protects everything you’ve worked for.

FAQ: What Martial Arts Schools Need to Know About Management Liability

What is Management Liability Insurance?

Management Liability protects your martial arts business from the risks that come from running the organisation itself — not from coaching or training.

While Public Liability covers what happens to others,
Management Liability covers what happens within your team, staff, board, or operations.

It shields owners, directors, committee members, and decision-makers from claims involving:

• Employment practices
• Allegations of mismanagement
• Breaches of regulations
• Staff behaviour
• Internal disputes
• Workplace compliance issues
• Fraud or dishonesty

In simple terms:
It protects the people who run the business, not just the business itself.

How is it different from Public Liability or Professional Indemnity?

This is one of the biggest misunderstandings I see among dojo and gym owners.

Here’s the breakdown:

Public Liability

Protects you when someone is injured or property is damaged.

Professional Indemnity / Civil Liability

Protects you if your coaching, training instructions, or advice causes harm.

Management Liability

Protects you from internal risks like wrongful dismissal, bullying claims, regulatory breaches, tax audit issues, or dishonest staff.

They are three completely different protections.
And together, they form a complete safety net for martial arts operators.

Who is covered under Management Liability?

Coverage typically extends to:

• Owners
• Directors
• Committee members
• Senior staff
• Managers
• Decision-makers
• Employees acting on behalf of the business

If someone claims a leader, manager, or representative has done the wrong thing, this policy steps in.

Why do gyms, dojos, and martial arts clubs need it?

Because the biggest hits I’ve seen owners take didn’t come from the mats…
They came from:

• Staff disputes
• Harassment allegations
• Unfair dismissal claims
• WHS investigations
• Payroll mistakes
• Mismanagement accusations
• Poor decisions made by staff or branch managers

One internal mistake can easily snowball into a legal and financial headache.

Management Liability catches these issues before they crush your business.

Common Situations Where Management Liability Saves the Day

Over the years, I’ve seen dozens of real-world cases like these:

1. Staff Complaint Goes Legal

A coach is dismissed after repeated lateness.
They claim the dismissal was unfair and discriminatory.

Without Management Liability:
You pay all legal fees and potential settlements yourself.

With Management Liability:
Employment Practices cover steps in to defend you.

2. Branch Manager or Franchisee Misconduct

A branch manager mishandles money or a complaint.
The brand (your name) is blamed.

Without ML:
You’re personally exposed as the owner or director.

With ML:
Directors & Officers cover helps defend and protect you.

3. Regulator Investigation or WHS Breach

Even a minor incident can trigger a regulatory inquiry.

Without ML:
You cover fines, penalties (where legally allowed), and legal fees.

With ML:
Statutory Liability covers your defence and related costs.

4. Employee Theft or Fraud

Every industry faces this risk — martial arts included.

With ML:
Employee Dishonesty coverage helps recover losses where possible.

5. Tax Audit

Even if you’ve done everything correctly, an audit can drain time and money.

With ML:
Tax Audit expenses are covered so you’re not footing the bill.

What kinds of incidents does Management Liability cover?

Most policies include protection for:

• Directors & Officers Liability
• Employment Practices Liability
• Employee Dishonesty
• Statutory Liability
• Superannuation Liability
• Corporate Legal Liability
• Public Relations Expenses
• Identity Fraud
• Tax Audit Costs
• Court Attendance Costs
• Contract Breach Defence

This is the safety net that protects the people running the business.

Is Management Liability only for large organisations?

Not at all.

In fact, small and medium-sized martial arts schools often have higher risk, because:

• Owners personally handle HR, payroll, staff disputes, and complaints.
• There are fewer resources to deal with legal issues.
• A single claim can financially overwhelm the business.

If you have staff, contractors, coaches, or multiple branches, you need this cover.

Does Management Liability cover franchisees or affiliated clubs?

Yes — depending on how you structure your policy.

Many martial arts associations, multi-branch dojos, and growing gym groups include Management Liability to:

• Protect the parent brand
• Cover directors and committee members
• Safeguard decision-makers across branches

A specialised broker can tailor this properly.

What happens if an employee commits fraud or theft?

Employee Dishonesty coverage helps reimburse your losses from:

• Theft of money
• Theft of equipment
• Fraud
• Embezzlement

This happens more often than owners expect — and it’s devastating without cover.

Are fines and penalties covered?

Some statutory penalties are covered, depending on the state and circumstances.
Legal defence costs are generally included.

A broker can explain which parts apply to your situation.

Why Management Liability Belongs in Your Business Plan

Your martial arts school or gym is more than mats and memberships — it’s a living organisation full of people, expectations, and responsibilities. As your team grows, your exposure grows.

Management Liability protects:

• Your personal assets
• Your business assets
• Your leadership team
• Your brand and reputation
• Your financial stability

It closes the gap between “what happens on the mats” and “what happens in the office.”