Overview: A blended policy offering financial protection against professional service claims, directors and officers liability claims, employment practices liability claims and outside directorship liability claims in the operation of a venture capital or private equity entity.
Who is it for?: Private Equity and, Venture Capital Managers, and related investment funds and partnerships. Protects past, present and future directors and officers including private company board seats, board observer seats, shadow directorship positions, and approved persons, advisory board members as limited partners and as board participants, general counsel and risk managers.
There’s growing recognition of the attractions of the venture capital and private equity sector, especially in relation to historical comparisons of returns against other market indices, but participation is far from risk-free.
VC Protector affords broad organisational and managerial liability protection for firms in this sector and their management from risks ranging from allegations of mismanagement, breach of fiduciary duty, statutory liabilities, errors and omissions in investment advisory and professional services, through to employment practices violations.
The UK venture capital sector is now the largest and most developed in Europe, accounting for nearly 40% of total annual private equity investment and over £5.3 billion in 2004*. Many of the emerging risks arise from the difficulties associated with managing these pooled funds to the satisfaction of a broadening group of investors. Strong historical past investment performances are helping to draw in capital from a more risk averse investor base, including pension funds, increasingly prepared to take an activist role toward their investments or resort to litigation if these do not perform as expected.
Further, the complexity of structure and interrelationships of venture capital firms can in turn complicate litigation and any claims arising, as directors’ multiple roles and responsibilities potentially create conflicts of interest.
(*British Venture Capital Association)
· Shareholder pollution claims
· VC Protector is for private companies, however cover for public companies is available subject to underwriting
· Employment practice liability insurance for the corporate entity
· Professional services and investment advisory services to non-proprietary, third party funds and portfolio companies
Additional value-added risk management services including pre-loss regulatory and governance advice, including DLA loss avoidance and mitigation package.
