Volatile market conditions, greater regulatory scrutiny and the rise in institutional investors have increased hedge funds' operational expenses. Because of this environment, fewer insurance companies are offering coverage and the underwriting is tight. You need an experienced broker, who specializes in hedge funds, to advise and represent you.
The impact of these changes is: if your broker is not pro-actively managing your insurance program you can be left with less or no coverage at renewal.
This problem can be compounded if your broker is a generalist and lacks the expertise with hedge or private funds. In fact, a major insurer confirmed that the majority of brokers that approach them with a fund to insure have never insured a hedge fund before.
There are only a handful of markets for E&O/D&O and since the coverage needs to be negotiated, can be difficult to obtain, you only get one chance at pitching your company to an insurer and only one agent can represent you, why not align with an agency that has expertise and experience? |
