Is Your Firm at Risk?


In today’s volatile marketplace and with the continued increase of government regulation, Fund Managers face an increasing variety of adverse exposures.  Interactions with regulators, shareholders, investors, vendors, creditors and employees can lead to costly litigation.  These risks threaten the bottom line and the reputation of your Fund and its General Partners.

Consider the impact on your firm from the following:

  • Regulatory actions
  • Civil litigation
  • Misrepresentation of investment risks, financial condition or performance
  • Suitability/mismatching of investor to type of investment
  • Failure to supervise outside service providers
  • Improper valuation
  • Insider trading issues
  • Soft dollar and other conflict of interest issues
  • High fees vs. poor performance

Petschauer Insurance specializes in providing insurance for these risks.

For a Fund Manager, Management Liability is the Key Coverage protecting against these risks.

Why Buy Management Liability Coverage?

  • The primary reason is to pay for Defense Costs.  Most Funds indemnify the management entity.  If a lawsuit is brought against the management entity, the fund’s assets are used to indemnify the fund manager.  Management Liability Coverage can be used to fund defense costs and avoid using the Fund’s Assets.
  • A traditional Directors and Officers Liability policy alone does not provide adequate protection for a Fund Manager.  It may be impossible to determine if a claim results from “Professional Advise,” which is not covered by a D&O Policy.  Management Liability and Professional Liability are written together to protect against this risk.
  • Management Liability policies typically include Employment Practices Liability Coverage.  This coverage protects against suits brought by employees for wrongful termination, harassment or discrimination