Investment Management Insurance for Financial Institutions
Invested in those who drive funds forward
For investment managers and fund directors – and the funds in their care – striking a balance between risk and reward is foundational. That’s why Travelers developed an investment management insurance (IMI) solution that protects them from the professional and managerial liabilities inherent to their work.
Our comprehensive IMI policy combines professional indemnity with directors’ and officers’ insurance, adding optional commercial crime protection. So that those who guide our investments can do so with confidence, without fear of claims for mismanagement or professional negligence. Because ambition can only be realised with investment, Travelers commits without compromise to investing in the future of financial services professionals.
Our appetite
We cover
These fall within our appetite, and we’re happy to discuss details.
- Long-only funds
- Property funds
- Hedge funds
- Private equity funds
- Venture capital funds
- Mutual fund managers
- Fund of funds
We’ll consider
We may need more information to confirm a fit.
- Real estate investment trusts (REITs)
- Opportunistic fund strategies
- Stockbrokers (broker/dealer)
- Stock exchanges
We do not cover
Sorry, we’re currently unable to insure the following.
- Cryptocurrency funds
- Agricultural/forestry funds
- Hedge fund administrators
- Securities depositories
- Proprietary traders
- Independent financial advisors (IFAs)
Investment management insurance covers & highlights
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Includes professional indemnity insurance and directors’ and officers’ insurance, providing protection from:
- Errors and omissions
- Misrepresentation and misstatements
- Breach of duty
- Breach of investment mandate
- Negligent investment decisions
- Negligent management or board decisions
- Defence costs
- Fraud or dishonesty law
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Travelers IMI also offers:
- Additional ring-fenced cover for individual directors in the event of policy limit erosion
- Key person costs coverage – in the event of loss or incapacity of an important executive
- Extradition defence costs
- Loss mitigation cover – explicit cover to allow fast unwinding of an error without the need for underwriter permission, including a payment under UCITS IV strict liability rules
- Costs for attendance at official investigations – covers fees and expenses arising from attendance at an official investigation
- Automatic new outside board positions cover
- Automatic new fund cover – provides automatic cover for any new fund launches
- Alternative Investment Fund Managers Directive (AIFMD) compliant cover for limited perils in the Directive and reinstatable cover for the AIFM
Add-ons & extensions
These items may be available to add on to your policy
Commercial crime
A company’s money and property can be attractive targets for theft. We protect against direct losses caused by an employee or third party.
General questions
These questions will give you a sense of the information needed to write a policy.
- Is a fund prospectus document available?
- Can the firm provide recent performance reports?
- Are there existing biographies of the management team?
Let’s get specific
These are the kinds of detailed questions we will ask to better understand day-to-day operations.
- What is the firm’s investment strategy?
- How have funds performed historically?
- What are the organisation’s future fundraising plans?
- In what territories are the insured’s underlying assets?
- What are the redemption provisions of the funds?
- In which territories is the insured regulated?
- Are there any macro sector trends that could impact the insured?
- What type of investor does this fund work with and where are they domiciled?
- What is the investment style of this fund?
- Does the fund have any liquidity or solvency issues and, if so, what are they?
- What complaints, if any, do investors have about this fund?
- What are the fund’s redemption provisions?
- In which territory or territories is the fund domiciled?
Related products
Banking
From retail banks and commercial banks to building societies and credit unions – Travelers provides insurance solutions for clients in the small to medium-sized retail banking space.
Insurance
We’re committed to providing the insurance expertise and products needed to face the varied challenges of an evolving insurance sector.
Financial institutions
Fully invested and without compromise, our dedicated underwriters have deep knowledge of the financial sector with the backing of a strong credit rating.
Let’s start the right conversation
For business
Find a broker
If you’re looking for covers and have a broker, ask about Travelers products.
If you need a broker, start with the right broker directory.
Need to call us directly? Contact us.
For brokers
Tell us about your client
You’re likely busy. Let’s save some time.
We can help faster if you can give us information about your client first. Then we’ll call you back with the knowledge we need to make a decision.
Download a proposal form:
Investment management insurance
Fund directors & officers
Directors’ & officers’ liability (FI)
Civil liability (FI)
Crime insurance (FI)
Questions? Call us.
Case studies
A fund manager’s trading error leads to a loss
Travelers insured an investment advisor that operated an in-house fund on behalf of professional investors. In response to market conditions at the time, the insured’s investment committee decided to reduce the fund’s equity exposure by selling a proportion of futures contracts on the S&P 500 index in two tranches. However, in the process of initiating two sales, the insured inadvertently sold twice the number of contracts intended.
A reversal was attempted but came too late
The insured aimed to rectify the error by repurchasing the extra S&P contracts on the reopening of the relevant futures market on the evening of the following day. However, in the time between the erroneous sale and the repurchase, the markets moved against the insured, resulting in a loss of approximately US$1 million.
Financial institutions liability insurance protects against claims of negligence or error
Following an investigation of the incident and a review of available evidence, Travelers reimbursed the insured for this loss.
Asset manager is investigated
Our insured, an asset manager based in London, received a notice from a supervisory authority alleging that it had breached certain regulatory requirements regarding positions it held within the regulatory jurisdiction. The regulator had concluded that the insured had made numerous breaches, and, under local laws, each individual breach was punishable by a fine of up to €1 million.
Ultimately, the regulator closed its investigation and imposed a relatively small fine on the insured. The insured incurred external legal costs in seeking advice throughout the process.
Travelers cover provides the legal protection customers need in a highly regulated world
The insured’s policy with Travelers offered cover for the legal costs of defending the investigation.
Insights & industry knowledge
Articles to help your ambition succeed
Resources for Financial Institutions
Navigating the Storm: Challenges and Solutions for Property Funds in Today’s Economy
Any individual or business managing property is facing one roadblock after another.
Resources for Financial Institutions
Underwriting in a Turbulent Financial Climate
These are volatile times for financial institutions. Rising interest rates, stubborn inflation, and the impacts of ongoing supply chain challenges on investment performance have created a difficult trading environment for financial institutions around the world.
Resources for Financial Institutions
It’s a Volatile Time for Financial Institutions. Insurance Can Be a Comfort Blanket.
Are we in the throes of another 2008-esque financial crisis? The recent bankruptcies of Silicon Valley Bank (SVB), Signature Bank and Silvergate Capital in the US, alongside the hastily arranged buyout of Credit Suisse by UBS, might make us think so.
