Baronsmead Partners LLP (Baronsmead), a specialist fund insurance broker and risk consultant, has launched the UCITS Fund Directors’ and Officers’ Liability Insurance Cover, the first policy of its kind that is specifically targeted at the exposures of the UCITS fund industry.
Under the terms of the UCITS Directive, Directors of the fund management company are responsible for supporting all the activities of the fund. The UCITS Fund Directors’ and Officers’ Liability Insurance Cover protects directors against any actual or alleged breach of the eight key managerial functions: decision-making, monitoring: compliance; risk management; investment performance; capital; internal audit, financial control or supervision of delegates. Importantly, it also protects Directors against any actual or alleged breach by third party service providers for which the directors are vicariously liable.
Additionally, the UCITS Fund Directors’ and Officers’ Liability Insurance Cover protects against any actual or alleged breach of specific product rules which include the provisions relating to investments into any one open-ended fund not exceeding a maximum of 20% NAV, investment into non-UCITS open-ended funds not exceeding a maximum of 30% NAV in the aggregate, and a UCITS fund may not owning in excess of 25% of the shares or units of another single fund.
“The prospect of a claim against Directors remains a real threat and the growing popularity of UCITS funds has led to the need for an insurance product that specifically protects the Directors of the funds. The UCITS Fund Directors’ and Officers’ Liability Insurance Cover has been designed to cover claims arising out of breaches of the management and product functions prescribed in the UCITS directive.” says Robert Kelly (pictured), Founder and Senior Partner, Baronsmead.
