Talk to us about your IT Liability Insurance
In an environment where regulation is tightening and investor expectations are rising, investment managers face complex and evolving risks. From alleged mismanagement to administrative errors and compliance breaches, even a single incident can threaten your reputation and financial stability.
At Barrack Broking, we work with fund managers, investment advisers, and responsible entities to design tailored insurance solutions that address these exposures and protect your business — so you can focus on generating value for your clients.
What is Investment Managers Insurance
Investment Managers Insurance (IMI) is designed for Australian Financial Services Licence (AFSL) holders that raise capital or manage assets on behalf of investors (investment managers). It combines three forms of insurance cover into one policy. The main purpose of consolidating these insurances into a single contract of insurance is to avoid gaps in coverage that may arise if those insurances were placed separately and with different insurers.
The key coverage sections include Professional Indemnity, Directors & Officers and Cyber:
- Professional Indemnity – The Professional Indemnity section covers the AFS licensee or manager for claims alleging misrepresentation, acts, errors and omissions in connection with its “financial or investment services”. The indemnity includes cover for legal costs and expenses (to defend actions) and in the event there is liability, coverage is provided for compensatory damages. Cover is often extended to cover legal representation costs where regulators allege breach of statute in the provision of financial services, and some policies will, where permissible by law, pay fines and penalties for such breaches.
- Directors & Officers Liability – The D&O section covers directors, officers, trustees, compliance or investment committee members for wrongful acts alleged against the directors and officers of the company in the context of their management of the Responsible Entity/manager and any of its controlled funds or trusts.
- Crime and Fidelity – The Crime section covers the Responsible Entity/manager for internal (employee theft) and external crime that causes it to suffer a “direct financial loss” of money, securities, inventory or other property in its care, custody and control. Cover can extend to include forgery of negotiable instruments such as cheques and for losses arising from third-party forgery; and computer crime, including electronic funds transfer fraud.
The policy can include additional coverages such as:
- Representation at investigations and examinations, even in the absence of a specified Wrongful Act
- Automatic cover for new funds and subsidiaries created during the policy period.
- Directors and officers who have board seats on outside entities.
- Excess limit available for certain directors for unrelated claims after exhaustion of original limit
- Extension of the claim discovery period for retired directors and insured persons.
- Pecuniary penalties, PR expenses in connection with extradition or mitigation of adverse effects on reputation following exoneration.
- Loss establishment costs to investigate, prove, and report a direct financial loss under the policy.
Who needs Investment Managers Insurance?
Investment Managers, including directors, officers, and trustees, can be susceptible to lawsuits, regulatory proceedings, or written demands by disgruntled investors or third parties. Directors and senior managers can be held personally responsible for any exposure arising out of the management of their entities and funds.
The cover is designed for organisations and professionals involved in provision of ‘investment or financial services’. The definition varies between insurers and can be tailored to the specific serviced provided by a company, however generally it includes;
- Investment advisory
- Fund formation and capitalisation
- Fund management
- Responsible entity, trustee and licensee services
- Administration services
- Custodial services
- Registry services
Common occupations suitable for IMI insurance include Fund Managers, Private Equity managers, Hedge Funds, Real Estate Investment Trusts (REITs), Exchange Traded Funds and Private Credit Funds.
Why Barrack Broking?
Our industry experience and professional brokers ensure you have access to the most robust and appropriate insurance that provides all the protection your business needs, at an affordable price.
- We concentrate on understanding the risks your business faces.
- We can help you put strategies in place to reduce your risk exposures.
- We provide personalised support to respond quickly to your evolving needs.
- We work on your behalf to build exclusive solutions that offer genuine protection for your business.
- We work with you to minimise your insurance premiums and maximise your policy value.
- Our dedicated claims staff can offer advice on claims management
Talk to us about your Investment Managers Insurance needs
Our team is ready to help you identify and manage your business risks, to ensure you are fully protected. Don’t leave your business vulnerable to the financial and reputational damage of an uninsured loss. Contact the team at Barrack Broking today.
