Investment Manager Insurance

company details

Increasing volatility in the global financial markets, higher expectations from investors, and more investor and securities claims against investment managers, have highlighted the need for investment managers and their directors to be protected.

Investment Manager or Investment Management Insurance, refers to an insurance that covers such things as :

- Professional Indemnity

- Directors and Officers Liability

- Cyber

- Crime Insurance

The risks insured are:

• Wrongful act of an insured in terms of D&O, PI and Cyber

• Losses from crime, financial fidelity and cyber

• Costs and expenses of an insured

Potential claims may be made against the asset or investment manager or both by:

• Stockholders, investors, creditors, banks

• Supervisory boards

• The company itself, employees

• Regulators, state authorities, professional unions

• Customers, suppliers, competitors

Contact Ms Romi Gill or Robin Brown for more details - tel 852 2530 2530

It is vital to pay attention to the insurance policy's provisions regarding the timing and manner of advising regarding claims or potential claims

Underwriting Information Typically needed for a Quotation:

  • Fund Organization Chart and the Firm Organization Chart
  • List of the directors and their CV's
  • Latest Audited financial reports (for bioth the Firm & Funds)
  • Fund’s PPM & Fund factsheet
  • Investors % split by geographical (US / UK/ EU/ Australia/ Asia etc) ; type of investor by %

Any of the fund Partnerships, Managers or their Affiliates, and their third-party service providers are subject to risks associated with “cybersecurity” breaches.

“Cybersecurity” is a generic term used to describe the technology, processes, and practices designed to protect networks, systems, computers, programs, and data from authorized access or manipulation by other computer users and the efforts to avoid the resulting damage and disruption of hardware and software systems, loss or corruption of data, and/or misappropriation of confidential information.

Cybersecurity breaches may be the result of intentional actions, such as an attempt by a third party to fraudulently induce employees, customers, third-party service providers, or other users of systems to disclose sensitive information, in order to gain access to the Partner’s or Manager’s data or that of its investors, or the breach may be unintentional

In any event a successful Cyber-attack may cause losses to the the processing of transactions or impeding, sabotaging, or otherwise affecting the information systems upon which the business relies.

Such an attack could also result in the loss or theft of data or funds, loss or theft of proprietary information or corporate data, physical damage to a computer or network system, or costs associated with system repairs.

Any such breach could expose the business to financial losses such as the costs of :

  • The forensic analysis of the origin and scope of the breach,
  • Increased and upgraded IT systems,
  • Cybersecurity countermeasures,
  • The disruption of its business,
  • Liability to investors or third parties,
  • Regulatory intervention,
  • Unauthorized use of proprietary information,
  • Litigation,
  • The dissemination of confidential and proprietary information, or reputational damage.

Losses could also arise from cyber-attacks affecting issuers of securities in which the business invests.

In spite of the systems the business may design to mitigate the risks of cyber-attacks, there are inherent limitations in such systems, including the possibility that certain risks have not been identified.

Furthermore, the business partners, managers, or Investment Advisers do not control the business continuity plans and systems put in place by their third-party service providers or any other third parties whose operations may affect the business.

As a result, the business could be negatively impacted by cyber-attacks against any of its, or any of its third-party service providers’, information systems.

Insurers and a summary of their product details appear below

Allianz IMI Premium Protect

Unusual in the market , this Allianz policy includes not just:

- Directors and Officers

- Professional Indemnity

- Crime

but additionally

- Cyber

Chubb offers two products for investment management..

  • Elite III for hedge and investment companies generally and
  • Elite Private Equity and Venture Capital

The key difference is the the latter policy provides Directors and Offiers cover for outside board members.. Often the PE. fund will invest in a company and in return have the right to appoint board members. Even if the company has its own Directors and Officers insurance, the cover may not be adequate..

Coverage Highlights - Elite III

Chubb's 'Elite III' Investment Management Insurance (IMI) policy. is designed to protect investment managers, investment advisors and the funds managed against management and professional liabilities arising from the provision of investment services. This policy is also extended to protect investment managers and funds managed from theft by employees or third parties.

The policy is a packaged policy comprising the following coverage(s):

  • Directors & Officers Liability Insurance (D&O) to protect individuals for specific management and personal liabilities.

  • Professional Indemnity Insurance (PI) for investment services offered by investment managers and advisors.

  • Crime Insurance to protect the investment managers and funds from theft by employees or third parties.

Key Features of Chubb Elite III

  • 􏰁 Covers:

    • Investment managers, investment advisers, general partners, funds, sub-funds, subsidiaries. its board of directors, invesment committee and employees.

    • Any act, error, omission, neglect, misleading statement, breach of trust, breadh of fiduciary or any dishonest acts of an employee in connection with any actual or alleged investment service provided

    • Any financial loss which the covered individual is legally liable, including legal and professional expenses incurred in defending litigation or regulatory investigation and damages awarded by a court or any settlement entered.

    • Any financial loss sustained from a dishonest act of an employee

  • Policy is non-rescindable

  • 􏰁 Automatic cover for new subsidiaries or funds, up to threshold of 20% increase in total asset or offering size; not active or domiciled in the US; not registered as an investment advisor in the US; or business or investment activities are not materially different

  • 􏰁 90 Day automatic cover provided in respect of ALL new subsidiaries and funds

  • 􏰁 Proportionate reinstatement of the policy limit if there is a claim recovery

  • 􏰁 Up to 84 months run-off cover for takeovers and mergers now applies to all insuring clauses

Directors & Officers and Professional Indemnity Covers

  • 􏰁 Pre-investigation costs cover for individuals to respond to on-site visits and raids by regulators, or regulatory requirements to attend inquiry hearings

  • 􏰁 Continuous cover – full continuity offered with ability to backdate with respect to previous insurers

  • 􏰁 Bail Bond Costs, Crisis Costs, Key Man Loss, Public Relations Expenses and Reputation Protection Expenses, apply to both D&O (including Company Reimbursement) and PI sections of the policy

  • 􏰁 Emergency Defence Costs and Legal Representation Expenses

  • 􏰁 Run-off cover for a subsidiary purchased through a Management Buy-out

  • 􏰁 Deprivation of Assets Expenses – payment directly to the providers of schooling, housing, utilities and personal insurance services in the event of an order confiscating, controlling, suspending or freezing rights of ownership of real property or personal assets, or creating a charge over real property or personal assets, of an insured person

Directors & Officers Cover

  • 􏰁 Retired Directors & Officers cover has no time restriction

  • 􏰁 Prosecution Costs extension Civil Fines and Pecuniary Penalties Extension

  • 􏰁 Occupational Health & Safety Extension

  • 􏰁 Tax Liability Extension covers personal liability for unpaid taxes of the Insured Organisation where it has become insolvent

  • 􏰁 Indemnity to the company for shareholder costs – covers shareholders’ expenses in pursuing a claim against an insured person on behalf of the company

  • An additional excess limit for all directors and officers in the event of the exhaustion of all other sources of indemnification, including the limit of liability

Professional Indemnity Cover

  • 􏰁 Loss of Documents 􏰁
  • Breach of Privacy
  • 􏰁 Mitigation Costs

Crime Cover

  • 􏰁 Crime cover incorporates employee dishonesty, computer crime, counterfeiting, forgery, fraudulent alteration, physical loss or damage
  • 􏰁 Interest cover – for lost interest that the company would have received, or the company has been legally obligated to pay to a client because of a crime loss
  • 􏰁 Cover the cost of any reasonable expenses incurred by the company to establish the existence and amount of any crime loss, in addition to the limit
  • 􏰁 Cover the expenses to reproduce impacted electronic computer programs to their operational capacity prior to the crime


There are a number of traditional exclusions which do not appear in Chubb’s Elite III wording. The exclusions also contain more carve- back, such as:

  • 􏰁 Insured v Insured Exclusion only applies to the US D&O and PI claims
  • 􏰁 Bodily Injury / Property Damage Exclusion does not apply for Non- Indemnifiable
  • 􏰁 Loss and Legal Representation Expenses
  • 􏰁 Pollution Exclusion –only applies to the PI section of the policy whereas pollution clean-up costs only are excluded in the D&O section


  • 􏰁 Notification of claims amended to allow additional notification period if a regulator legally requires the
  • insured to be bound by a
  • confidentiality agreement
  • 􏰁 Insured’s duty to defend claims,
  • other than actions brought against Insured Persons by Insured Organisation or Outside Organisation
  • 􏰁 Separate legal representation where conflicts exist between any Insured
  • 􏰁 No ‘Hammer Clause’
  • 􏰁 Rights of subrogation shall not be
  • exercised against an Insured Person unless committed a criminal, dishonest, fraudulent or malicious act
  • 􏰁 Order of Payments condition

Brochure, Application form & Policy sample

Download all as zip

Liberty details

Zurich's 'Asset and Investment Management Insurance' policy offers cover for' :

1. Management Insurance (More commonly known as 'Directors and Officers Insurance')

2. Professional Indemnity Insurance

3. Crime.

In order to handle situations where a private equity fund may have its own directors placed on boards of companies in which they have invesment, Zurich offers a 'Private Equity / Venture Fund' endorsement.'

With certain caveats, this endorsement covers the unintended wrongful acts of directors placed on boards of companies in which the fund has an invesment.. For a claim however, the company concerned has to exhaust its Directors and Officers cover and assets..

Zurich's policy is probably one of the most recent entries into the Hong Kong market. It was inspired by Zurich's Australian product

It has some added features that help differentiate the product from others in the market. For example, under their 'Professional Liability' cover, they include cover for ‘Correction’ costs such as the costs of correcting a miscalculation in the Net Asset Value. Under the same cover there is also USD500 a day in court attendance costs if you are required to attend as a witness.

Zurich's Investment Management Insurance cover is on a claims-made basis that provides coverage when a claim is made against it, regardless of when the claim event occurrs.

The policy provides 90 days cover after the policy expires and also provides for up to an additional 12 months 'extended reporting period' for an additional premium.

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Navigator Insurance Brokers Ltd
Unit E, 8/F Golden Sun Centre
No. 59-67 Bonham Strand West
Sheung Wan, Hong Kong