Finance Companies, Funds And Fund Managers

Insurance Coverage You Need To Stay Successful

Financial institutions — hedge funds, venture capital firms, fund managers, and investment management companies — are exposed to varying, complex risks ranging from volatile markets and increasing regulatory scrutiny to a more litigious operating environment. Putting in place protection with insurance products that fit your operations' requirements and scale is critical and key to retaining talent.

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Financial institutions — hedge funds, venture capital firms, fund managers, and investment management companies — are exposed to varying, complex risks ranging from volatile markets and increasing regulatory scrutiny to a more litigious operating environment. Putting in place protection with insurance products that fit your operations’ requirements and scale is critical and key to retaining talent.

Insurance Products

Required?

Insurance Products

Investment Management Insurance (IMI)

IMI provides a package of insurance products which typically include:

Professional Indemnity Insurance
D&O Insurance
Crime Insurance – crime by employees or third parties

Benefits

It’s a comprehensive way to cover multiple lines in one package of insurance.

Considerations

Cover includes individuals in multiple entities (fund and investment managers) to ensure no gaps:

Sufficient limits of cover.
Flexibility to include various extensions.

Required?

Yes

Good risk management
Contractual requirement

Insurance Products

Professional Indemnity Insurance

Also referred to as Errors and Omissions Insurance (E&O) provides cover against allegations of professional negligence whilst carrying out your professional service.

Benefits

Covers claims relating to negligence, errors and omissions whilst caring out your professional service.
It can include cover for legal defense, potential judgments or settlements.
Satisfies a client/buyer insurance requirement.

Considerations

Limits can be adjusted to suit SMEs through to large corporates.
The escalating number and size of professional liability claims highlight the litigious nature of business environments and the increasing importance of this type of cover.
Professional indemnity insurance can be used in marketing/pitching efforts to demonstrate a high level of due diligence and increase the ability to attract new customers/clients; often a pre-requisite for contract award.
As cross border trade involves multiple jurisdictions, it ensures sufficient geographical scope of cover.
Azure Risk provides tailored, industry-specific packages that cover D&O, Employment Practice Liability, Public Liability, etc.
To meet the criteria of client/buyer vendor requirements, we assist in reviewing specifications to ensure all minimum insurance policy requirements are met.

Required?

Yes

Good risk management
Contractual requirement

Insurance Products

Directors & Officers Liability Insurance

Directors and Officers (D&O) liability insurance provides personal protection for directors, officers and management against financial loss arising from the potential exposures associated with managing or supervising a company (whether private or listed), and legal representation expenses regarding regulatory investigations.

Benefits

Our policy wording provides market-leading D&O protection.
It improves key personnel retention and attraction. It’s not uncommon to see D&O insurance as a contractual requirement for new senior hires (e.g., boards of director, key managerial staff, and investment managers).
It satisfies a client/buyer insurance requirement.

Considerations

Limits can be adjusted to suit SMEs through to large corporates.
Company directors and officers are directly and personally responsible for a range of issues connected with their position, and this can include the actions or inactions of others.
D&O claims can come from a wide range of third parties including, employees, shareholders, customers, competitors, creditors, donors, government bodies and more.
Ensure adequate D&O insurance as a safety net to cover potential claims; even if allegations are unfounded, defense costs can be devastating, especially for smaller companies.
To meet the criteria of client/buyer vendor requirements, we assist in reviewing specifications to ensure all minimum insurance policy requirements are met.
Contractual requirements may require a company to indemnify and defend directors and officers who have claims against them. The duty to indemnify may go beyond a company’s ability to pay.

Required?

Yes

Good risk management
Contractual requirement

Insurance Products

Public Offering of Securities Insurance (POSI)

POSI protects a company, its directors and officers and other parties against the risks of claims due to misleading information in the investment prospectus sent to current and potential investors.

Benefits

Allows companies to ring-fence prospectus liability by dovetailing with our Directors & Officers Liability Insurance to ensure no gaps between the products.
Covers claims of misleading or inaccurate information in the prospectus.
Standard coverage is for 6 years, but a shorter duration is possible.
The cover continues to apply even if the management of the company changes.

Considerations

Our POSI policy covers a company and its directors, officers and employees for securities claims brought against them in connection with an offering. The following are excluded:

Prior claims and known circumstances.
Bodily injury/property damage.
Dishonest/fraudulent act.
Major shareholder exclusion.

Required?

Yes

Good risk management
Contractual requirement

Special Purpose Acquisition Companies (SPACs)

Protecting the personal assets of the board of a SPAC requires a deep understanding of the risks and liabilities faced by directors and officers of these companies as they raise capital, pursue a target, and ultimately complete their business combination.

The directors and officers of a SPAC face unique exposures and a direct risk to their personal assets. It’s essential to secure comprehensive and effective insurance over the lifecycle of a SPAC.

Benefits

Protect the entity, directors and officers of a SPAC and their personal assets.

Considerations

The funds held in SPAC trusts cannot be used to indemnify directors and officers.
In the absence of an appropriate insurance program, individuals could be forced to dip into their own pockets to cover defence costs and potential settlements resulting from a claim.

Required?

Yes

Good risk management
Contractual requirement

Insurance Products

Office Insurance

A comprehensive package of office insurance products covering Contents, Public Liability (on premise) and Employees’ Compensation (EC) Insurance.

Benefits

Employees’ compensation insurance protects against Common Law and Statutory liabilities under the laws of the HKSAR.
Efficiently provides cover for contents on an ‘All Risk’ basis and public liability, third party (in premise).

Considerations

Limits can be adjusted to suit SMEs through to large corporates.
It can be extended to cover stock on-premise, in a warehouse or other location.
Hong Kong’s Employees’ Compensation Ordinance is enforced on a strict liability basis, and it’s critical to ensure EC Insurance appropriately covers all employees and clarifies any grey areas related to contractors and volunteers.

Required?

Yes

Good risk management
Contractual requirement
Compulsory requirement

Insurance Products

Cyber Liability Insurance

Increased reliance on digital systems and access to information online significantly increases our vulnerability to cybersecurity threats. Azure Risk understands how to minimize gaps and tailor coverage for loss, compromise, or electronic data theft. The main areas of cover include:

Business interruption: expenses and lost revenue due to a ransomware attack, distributed denial-of-service (DDOS), operator error (accidental deletion of data), or any other computer virus or malware attack impairing a computer system. Our policies go beyond the cover typically provided in an Office Insurance package.
First-party coverage: expenses relating to recovery from damage to computer programs and electronic data. For example, incident response (an actual or suspected cyber event), data and system recovery, and cyber extortion.
Third-party privacy and network security liability: breaches of personal or corporate information and data protection laws.
Funds transfer fraud and telephone hacking: fund transfer fraud involves a malicious hack; telephone hacking involves unauthorized access to a phone, such as intercepting calls or recording conversations. Social engineering is a type of cybercrime that uses techniques to trick people into sending money or divulging confidential information such as passwords, bank details or other personal, protected or proprietary material. When directed toward business entities, the goal is to fool employees into sending money, diverting a payment or transferring funds to the fraudster.

Benefits

We cover extra expenditures resulting from the physical destruction or theft of information technology assets and typically include costs associated with the following:

Meeting extortion demands from a ransomware attack.
Notifying customers when a security breach has occurred.
Paying legal fees levied as a result of privacy violations.
Hiring computer forensics experts to recover compromised data.
Restoring identities of customers whose PII was compromised.
Recovering altered or stolen data.
Repairing or replacing damaged or compromised computer systems.

Considerations

Limits can be adjusted to suit SMEs through to large corporates.
Organizations need to adapt as quickly as cyber attackers do, and cyber insurance plays a crucial role in overall risk mitigation strategies.
Not all policies provide the same coverage, and it’s critical to understand the differences from each provider to ensure your business is protected.

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Required?

Yes

Good risk management
Contractual requirement

Special Offer:

Free Commercial grade Antivirus, Firewall and Cloud Backup for up to 30 windows PCs

Insurance Products

Group Medical & Group Life Insurance

Aside from providing customized insurance protection, Group Medical and Life can also be used as employee retention and talent acquisition tool.

Benefits

Covering medical expense, where possible on a direct billing/cashless basis
Wellness benefits helping your colleagues stay healthy
Coverage for both physical and mental health
Medical history disregarded where the group size supports
Medical insurance apps to help with finding doctors and submitting claims

Considerations

Plans can be customized to suit SMEs through to large corporates, with multi-tiers of benefit levels ensuring that staff at all levels can have insurance covered.
Medical History Disregarded is not guaranteed and must be negotiated in
Ensure that the geographical scope of cover matches with the movement of the employees covered
Can be extended to cover dependants
Important to know the difference between scope of benefits and meaningful quality of cover
Not all insurers are created equal, price may be a driver, but it is also important to use a provider with ample resources available to deal with the administration and claims associated with a medical policy

Required?

Yes

Good risk management
Contractual requirement

Improve employee retention