Investment Management Insurance

Investment Management Insurance is a flexible, cost-efficient insurance programme designed to address the specific management liability, professional liability and crime exposures faced by investment managers. It provides umbrella protection for those financial liabilities that traditional Professional Indemnity or Directors and Officers insurance policies will not provide unless significantly amended.

An Investment Management Insurance policy is individually tailored to respond to claims that are frequently encountered by investment managers, responsible entities, investment trusts or funds and their professionals, as well as directors and officers of these entities.

The structure and inter-relationship between investment management companies and investment funds creates a myriad of potential exposures. Investment mangers are likely to owe duties, as both company officers and as professionals, to shareholders, investors, employees and third parties. One mistake may lead to claims from any or all of these parties.

Investment Management Insurance policies typically provides coverage for:

  • Responsible entities
  • Investment managers
  • Investment advisors
  • Fund managers
  • Venture capitalists
  • Private equity firms

Investment Management Insurance Cover highlights includes:

  • Cover for entity
  • Professional liability insurance for investment advisors/managers and funds when providing investment advisory services. Crime cover provides protection to the Investment Manager and the Funds for loss following theft by Employees or any other person.
  • Cover for individuals

Professional Indemnity and Directors and Officer Liability/Company Reimbursement Insurance is included to protect both professional indemnity claims and management liability claims against investment advisors/managers and Funds, including their senior managers, directors and Compliance Committee members.

Key Features of an Investment Management Insurance policy typically include:

  • Violation of investment guidelines and/or investment management contract
  • Breach of securities regulations
  • Shareholder class action suits
  • Allegations of lack of due diligence, unintentional misrepresentation, incorrect execution of orders, and suitability
  • Individual insureds that are the subject of a regulatory investigation
  • Exchange traded funds and hedge funds
  • Punitive damages, where insurable

Investment Management Insurance policies can also include amongst other things:

  • Coverage for the management liability exposures of entity investment advisors
  • Final adjudication language
  • Order-of-payment provisions
  • Worldwide protection for any covered claim, including trading exposures
  • Broad definition of employee
  • Protection for advisory board members
  • Protection for domestic partners
  • Post-policy reporting period

Contact us for further information and/or details concerning IMI insurance scope and terms as specified in the policy wording.