Insurance for investment firms

A policy covers only the entities and people it defines as insured. Insuring the management company doesn't automatically cover every fund or every partner.

So we begin by listing the management company or adviser, the general partner, each fund and vehicle, and the people who act for them, including advisory work and seats on outside boards. Then we check each one against your policy.

• Launching a fund or advisory business. We work out which entities and activities need cover, and get quotes.
• Investor diligence. Send us the questions and requirements your investors have sent, and we'll show you how your coverage measures up.
• A change in strategy or structure. New vehicles, services, acquisitions, and board seats aren't always picked up by an existing policy. We check, and get them added.
• Hiring or renewal. We check that the policy still fits the team and the business, and take it back to insurers if it doesn't.

Management and professional liability

D&O covers claims about how the firm is run. E&O covers claims about the investment services it provides. Investment firms often buy both in one policy. We tell you what each part covers and whether they share a limit.

How D&O and E&O work for investment managers

Cyber and crime

A data breach and stolen money are different losses. Cyber insurance is for the first and crime insurance is for the second. A payment sent to a fraudster can fall between the two, so we review them together.

Employees and business operations

Once you have staff and an office, the firm needs the same coverage as any other business: employment practices liability, workers' compensation, general liability, and property. We handle those too.

What any policy covers depends on its terms, limits, and exclusions. We read them, so you know where you stand before you rely on it.

For examples of how insurers package these coverages, see The Hartford's investment adviser resources and Chubb's asset management overview. They describe those insurers' products and are not an offer of coverage from Cilantro.

• An entity map: the adviser or management company, general partner, funds, and related vehicles.
• A description of the business: strategy, services, assets under management, team, and any changes you're planning.
• Your current insurance: full policies with endorsements, renewal dates, and any claims history.
• The requirement or deadline: investor questions, insurance language in a contract, or a launch or renewal date.

You don't need to upload anything with the call request. We'll ask for documents when we follow up.

If the manager is insured, are the funds covered too?

Not automatically. Each fund and vehicle has to fall within the policy's definition of who is insured. We check each one, and whether the funds share a limit with the manager.

How much coverage should we buy?

There's no standard answer. We start with what your investors and contracts require and what a serious claim could cost to defend. Then we compare options, keeping in mind that legal fees usually reduce the limit and that several entities may share it.

Our investors sent an insurance requirement. Is that all we need?

It's the minimum. An investor requirement tells you what they want to see. It doesn't tell you whether the policy fits the way your firm operates. Send us the exact request and we'll compare it with what's on offer.

• D&O and E&O for investment managers, explained
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