Chartis enhances business insurance policy for select firms

One insurer has recently announced it will be enhancing its business insurance policy for select venture capital and private equity firms.

In an attempt to meet both new and existing threats in a regulatory and economic environment that is ever-changing, commercial insurance provider Chartis announced its policy will now cover key risks associated with costs resulting from investigatory activity.

The new policy from Chartis includes not only outside director’s liability and directors’ and officers’ liability but will also have provisions for professional indemnity cover as well. The insurer blended the three covers into one in order to remove both unnecessary exposure and possible gaps in cover for both the directors and officers of a company and the company directly, Chartis said.

Chartis head of UK financial institutions, Paul Russell, stated that investment houses have had their optimism renewed as evidenced by a recent uptick in buy-out activity. Despite this, Mr Russell stated that Chartis can expect more actions by portfolio companies, shareholders, regulators, and investors due to an environment that has grown more demanding in regards to its greater focus on due diligence, corporate governance, and regulation.

Both the number and the scope of investigations has undergone a substantial increase since the global financial crisis, added the Chartis UK head.  Additionally he said there has been continual growth in the size of fines as well.

As just recently the Serious Fraud Office and City Police conducted a series of widely reported raids at dawn, resulting in several arrests, Mr Russel stated that firms need to ensure they are covered against such an occurrence.

Mr Russell also stated that crises such as bankruptcy of a portfolio company, loss of a key person, or attacks against a firm’s reputation could cause direct harm to its ability to do business.

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