Investment managers and others providing investment style advice, face a wide range of risks in the conduct of their business.
Certain insurance requirements such as Professional Indemnity and protection against Fraud (Fidelity Guarantee) of its officers are regulated through legislation, protection for the private assets of Director’s & Officer’s is also a prudent exposure to insure against.
Most Australian Financial Services Licensees providing services to Retail Clients, are subject to specific regulation about the level and types of insurance they must purchase to protect their clients – refer to ASIC Regulatory Guide 126.
The policy combines Professional Indemnity insurance, Directors’ and Officers’ Liability insurance and Crime insurance. The limit of indemnity can be shared across the three policy sections which has the benefit of reducing the overall premium. Policies with individual limits are also available however at higher premiums.
A Managed Investment Scheme, rests liability to the scheme members with the responsible entity, even if caused by the negligence of an agent. Further, officers, employees and compliance committee members all have duties, breaches of which can expose them to the prospect of claims.