Private investment funds

Tailored industry coverage

 

What are private investment funds?

When a start-up company is looking to raise capital to fund their venture but doesn’t have the years of experience that traditional banks like to see, they will often seek private investment funds. Unconstrained by banking regulations, these funds often provide capital based on an idea and its potential, rather than a company’s history.

Capacity

$5M maximum limit.

Coverage & Benefits

Primary coverage includes:

  • Built-in coverage for inquires of insured persons, coverage for expenses related to crisis management, and coverage for extradition costs.
  • Additional limits for independent directors. 

Secondary coverage available for:

  • Cyber/Privacy to protect against data breaches and theft of sensitive information,
  • Lender Liability, which covers claims related to lending activities breach of contract and fraud,
  • Employment Practices Liability (EPL) to protect the company from lawsuits brought by employees,
  • Fiduciary, covers the liabilities of those responsible for managing employee benefit plans, and
  • Employed Lawyers for in-house attorneys. 
FAQs
  • Do you have the ability to offer cyber coverage?

    Cyber can be included on this policy as a separate coverage part
     

  • I already buy D&O, why do I need to buy E&O?

    D&O coverage generally excludes claims brought by customers or regulators alleging the failure to provide professional services.  E&O is designed to provide that coverage.
     

  • Does your policy respond to an informal regulatory investigation?

    While informal investigations do not traditionally meet the definition of claim, our policy can provide defense coverage for insured persons to respond to informal regulatory investigations. How does the policy respond when a legacy fund is wound down? So long as the policy is continuously maintained with us, coverage is for claims arising from wrongful acts while the fund was active.
     

  • Are GPs, Co-Investment Funds, AIVs and SPVs covered?

    Yes
     

  • Is there coverage provided for insured persons serving on the Board of Directors of a portfolio company?

    There is Side-A coverage for such persons in excess of the portfolio company’s D&O insurance and ability to indemnify the insured person.
     

  • Does the policy extend to an independent contractor I ask to sit on a portfolio company board?

    Coverage extends to any natural person acting at the direction of the Named Insured and whom the Named Insured chooses to indemnify.

Related products

Package Private investment funds coverage with the following products: Cyber and Management Liability.

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Claims scenarios 

Not sure what risks our product covers? We’ve brought some scenarios to life.

Private investment funds

A technology start-up raised an initial round of funding from three angel investors who each received 10% equity in the company in exchange for their $1 million investments. The company grew rapidly, and another financing round was floated to finance the growth. The company accepted an offer from a well-known investor of $1 million for 20% equity. The original investors sued the start-up for diluting their investment by half.

Private investment funds

A technology start-up raised an initial round of funding from three angel investors who each received 10% equity in the company in exchange for their $1 million investments. The company grew rapidly, and another financing round was floated to finance the growth. The company accepted an offer from a well-known investor of $1 million for 20% equity. The original investors sued the start-up for diluting their investment by half.