Private Equity & Venture Capital

Private Equity & Venture Capital

Helping you reduce risk from multiple sources

Challenges: Private Equity and Venture Capital Firms and Funds face a number of threats and challenges in today's marketplace, including, but is not limited to:

. SEC investigations
. Conflicts of interest between the firm and the portfolio companies
. Outside directorship liability
. Suits from limited partners
. Bankruptcy
. Employment practices
. Intellectual property and nonpublic information
. The Financial Stability Act
. Administrative Errors and Omissions

Private Equity and Venture Capital Firms and Funds need management liability insurance coverage to protect themselves from indemnity and financial insolvency, as a backstop for non-indemnifiable claims, and to protect the firm or fund performance. Pioneer will work with you to determine the right coverage for your firm or fund(s). Topics such as professional services performed, regulatory exclusion, fraud, loss and claims will be discussed with you to analyze your potential exposures and draft a policy that addresses your firm's unique risk profile. While each situation and firm or fund is different, private equity and venture capital firms or funds should generally consider carrying the following coverages:

General Partnership, Management Liability, and Professional Liability
General Partnership, Management Liability, and Professional Liability provides coverage for the private equity and venture capital firms and funds for suits alleging wrongful acts committed in their capacity as directors, officers, managing members or general partners of a fund. Coverage can include outside directorship liability coverage on all private companies and scheduled public companies. The definition of professional services includes, but is not limited to, investment advice and the management and operation of the funds, asset allocation; the selection and oversight of outside service providers; marketing and solicitation of private funds; the formation, capitalization, and disposition of portfolio companies, including acts in the capacity of controlling shareholder and the review, analysis and selection of other funds. Coverage can also be expanded to include coverage for Employment Practices Liability, Private Company Directors & Officers Liability Insurance, and
Outside Directorship Liability coverage.

Outside Directorship Liability
Outside Directorship Liability is the coverage provided by General Partnerships/Management Liability Insurance for service on boards of directors outside the insured firm. Typically, such coverage only extends to service on the boards of nonprofit, rather than for-profit companies. Outside directorship liability coverage is found within the majority of corporate General Partnerships/Management Liability Policies and is written on either a double excess or a triple excess basis.

Fiduciary Liability
Fiduciary Liability covers trustees, employers, fiduciaries, professional administrators, and the plan itself with respect to Errors and Omissions (E&O) in the administration of employee benefit programs as imposed by the Employee Retirement Income Security Act. This title and definition needs to be the same throughout all of the sliders.

Cyber Liability
Cyber Liability covers first and third party risks associated with e-business, the Internet, networks and informational assets. Coverage can include, but is not limited to, privacy issues, the infringement of intellectual property, cyber ransom, business interruption, virus transmission and breach response.

Employment Practices Liability Insurance
Employment Practices Liability Insurance coverage for employment practice allegations made against the insured organization and insured persons. The policy includes, but is not limited to, coverage for claims of discrimination, sexual harassment, hostile work environment, wrongful termination and other employment-related issues.

Blanket Bond
The Blanket Bond, also called the Financial Institution Bond, protects firms and funds against loss from dishonest acts of employees, burglary, robbery or theft (both on the premises and in transit), forgery, counterfeiting, misplacement, check kiting, electronic funds transfer as well as a number of other perils particular to the financial sector. Some underwriters extend coverage to include kidnap/ransom coverage. If Kidnap/Ransom extortion coverage is not part of the bond, it can be purchased separately.

Representations and Warranties
Representations and Warranties protects when complex transactions, such as mergers and acquisitions, carry risks for both parties involved in the transaction. Pioneer can help structure insurance coverage to mitigate and fund uncertainties created by purchase and sale transactions.

Claims Advocacy
Claims Advocacy can sometimes be a complex process which is why our dedicated claims management personnel work closely with our clients to successfully navigate the claims handling process with them. Claims advocacy includes: consulting with clients on best practices for early identification and reporting of covered matters, to claims submission on our clients behalf and analysis of carriers coverage positions through structuring of settlement agreements and oversight of expense reimbursement and claims payments. Our goal is to identify responsive coverage provisions and be instructive as to potential hurdles and consequences in the course of a claim's adjudication.

To discuss your firm or fund's specific needs, please contact us here.

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