But the stakes are high: bad timing, hidden financial complications, disappearing assets and underinsurance can all mean potential disaster. Plus, the sector is seeing increased litigation threats arising from portfolio company bankruptcies, dissatisfied investors, regulatory investigations and employment practices lawsuits. These pose new levels of risk to Private Equity firms, as well as the personal assets of their managers and employees.
JMGlendinning are trusted by some of the UK’s top Private Equity Firm insurers who have designed for us an exclusive insurance programme aimed at the small to mid market SME sector, which benefits from blanket cover on the core insurances within 24hours notification.
What does Private Equity Firm Insurance cover?
When it comes to Private Equity Insurance, policies are highly tailored, depending on the kind of business being acquired and its associated range of risks. However, the following covers are most typical:
- D&O Cover (Directors & Officers’ Liability Insurance). This provides protection against legal and financial damages if one of your Managers, Directors or Owners is sued personally for a perceived loss. In the case of Private Equity this can be particularly complicated to arrange, as management roles may span the Private Equity firm and one or more portfolio companies.
- Professional Indemnity Insurance. The areas of investment capital and investment management are highly susceptible to claims of mishandling, mismanagement, or so-called ‘bad advice’. High Net Worth individuals invest substantial sums and expect a healthy return. If this fails to happen, the Private Equity Firm may be held responsible – and face damages as well as substantial legal costs.
- Financing Insurance. This provides protection for the full range of financial complications, debts and shortcomings that are typical in failing firms.
- Employers’ Liability. Due to the highly charged nature of the field, Private Equity firms and their managers are particularly vulnerable to legal charges arising from claims of wrongful termination, discrimination, harassment, retaliation, and other employment practices violations.
Why purchase your Private Equity Firm Insurance through JM Glendinning?
Private Equity firms have no time to lose, and insurance is not an optional extra. As an experienced broker with an exclusive scheme authority, we are able to design and implement policies on core covers within 24 hours of being notified. Cover is arranged with reputable insurers, and working this way removes delays caused by site visits, due diligence and time negotiations with other insurers. The result is the right cover with a quick turnaround time.
Claims can be especially complicated in Private Equity. Our experience of the market, as well as our established relationships with insurers, mean we can effectively pursue claims, and ensure the best outcome. Of over 3,000 Insurance Brokers in the UK, we’re now in the Top 75 and are members of BIBA (British Insurance Brokers’ Association).