Private Equity Liability Insurance is liability coverage for private funds such as private equity (venture capital) funds and hedge funds. Coverage and pricing varies greatly depending upon the type of professional operation, the specific services…and its size” to “the specific services provided, size, location, etc.
Private fund managers are faced with similar professional liability exposures and claims as their corporate director and officer counterparts. A comprehensive, enterprise-wide approach to risk management is paramount for private equity firms, and, in fact, such an approach has become critical to a firm’s survival. Proactive risk management can become a point of differentiation, adding stakeholder value while protecting important assets.
As the private equity industry continues to grow increasingly competitive, more and more private equity sponsors will look for ways to assuage fears and bolster investor confidence as they redefine their approach to doing business. These firms require tailored risk solutions that include portfolio company risk strategies, comprehensive insurance advice and placement, and technical claims expertise. This is where a strong knowledge of risk management and insurance markets can deliver customized risk solutions that drive value and create operating efficiencies.
Having a partner who can help navigate the uncertain terrain of this risk landscape will doubtless prove to be a most valuable asset. At The Cayemitte Group our expertise and understanding of the market can provide you and your stakeholders with superior insight and confidence.
Coverage is typically provided on a claims-made basis. Limits and deductibles vary with the size and type of insured. Standard limits for most small to medium-sized organizations start at $10 million, but purchase limits run from a minimum of $1 million to massive limits for the largest funds. Policy forms vary significantly, but typically are claims-made forms with defense costs included within the limit and deductibles. Coverage provisions can be customized for special circumstances.
Coverage can be provided with a combination of coverage options. Typically, they are blended policies inclusive of professional liability policies for private fund managers including directors & officers liability and general partnership liability. Additional coverages can include *cyber liability and employment practices liability coverage. Bonds, including fidelity and ERISA bonds, may also be necessary coverages.
*(Cyber Liability addresses the first- and third-party risks associated with e-business, the Internet, networks and informational assets.)