Business insurance provider Chartis modifies policy

One business insurance provider has recently announced it will be modifying its policy for venture capital and private equity firms to ensure it adapts to a regulatory environment that has been growing ‘more robust.’

Commercial insurance specialists Chartis has stated that the policy changes will include increased costs such as would be associated with investigations.  The insurer stated that these costs have increased as the regulatory climate has become more robust in the aftermath of the global economic crisis.

The firm’s new policy includes directors and officers liability and professional indemnity cover in addition to cover for outside director’s liability.

Chartis’ UK financial institutions head, Paul Russell, stated that investment houses have been becoming more optimistic as of late, as evidenced by the rise in buy-out activity.  However Mr Russell stated that an increase in actions by portfolio companies, investors, shareholders, and regulators can be expected as the environment has grown more demanding and more focused on corporate governance, regulation, and due diligence.

There has been a substantial increase in both the number of investigations undertaken and the scope of each investigation in the wake of the economic crisis, remarked the Chartis official.  The size of fines has been continuously increasing, he said.

Firms need to make sure they are able to pay the defence costs of a holding company or firm in the event that a buyer brings a claim for any alleged breaches of warranty, added Mr Russell.

One of the largest firms to specialise in the business insurance market in the UK, London-based Chartis Insurance UK Limited has offices throughout the country.  Chartis’ clients include more than half of the top 1000 UK companies, in addition to many smaller businesses and public sector organisations.

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