There are several parties that are covered by an Investment Managers Policy including the following:
- An employee for which the insured entity is legally liable;
- An employee to the extent that they are involved in or take part in the management of the entity;
- A director or officer, including a responsible officer or member of a compliance committee;
- A trustee of a fund; and
- The entity/company.
In addition to this, coverage can also be extended to the insured entity’s vicarious liability arising out of the acts, errors or omissions of agents and/or custodians.
What cover is provided under a Investment Manager’s Insurance Policy?
An investment management insurance policy is a combination of three separate insurance policies including professional indemnity, directors & officers insurance and fidelity or employee theft. The insuring clauses are generally separated along these insurances to provide cover for:
1) Professional Indemnity: providing cover for a breach of professional duty in the capacity of a responsible person, fund manager, advisor or trustee of a fund. Vicarious cover is also available for a breach of duty by an agent or custodian of an insured.
2) Managerial Liability: this encompasses the cover for the directors and officers of the fund manager as well as compliance committee members. Cover may also extend to employees acting in a managerial capacity.
3) Fidelity/ Employee Theft: depending on the insurer this covers the management entity or a fund for loss (of invested monies or interest) arising from theft by employees of the management entity or a third party.
The coverage afforded by the combination of these three policies is designed to provide an ‘all-in-one’ solution. Like all insurance policies however there are specific exclusions which apply to each coverage section.
Tags: bizcover, Business Insurance, Professional Indemnity Insurance
