Private Equity Professional Liability

Overview
In past years, investors enjoyed extraordinary returns on their investments in private equity and venture capital funds. A liquid IPO market and an increase in public to private deals made private equity funding increasingly attractive. Staggering sums of money were invested and new funds were created to accommodate investor demand. These historical levels of returns reached an inevitable fall-off, leaving professionals at risk for a multitude of liability exposures. An increase in corporate scandals and allegations of wrongdoing further encouraged investment providers to take a hard look at their own accountability. Self-defense strategies are essential since no one is immune from the potential of costly litigation or damage to reputation.

PIA's broad and comprehensive program applies to private equity funds and their individual and organizational general partners. Our benchmark policy includes coverage for the most important activities that a private equity firm engages in, including (among others) the creation and administration of a private equity fund, the investment in and rendering of management services to a portfolio company and service as an outside director or officer of a portfolio company.

In this increasingly litigious environment where lawsuits may be brought by portfolio companies, their other shareholders, or even potential portfolio companies, more and more of directors' personal assets may be exposed in the performance of their day-to-day duties, making coverage invaluable to the directors, their firms and their limited partners.

• Blanket Outside Directorship Liability for both public and private companies with no pyramiding of limits restrictions
• Full entity coverage for funds, general partnerships and management companies
• Definition of insured persons includes those serving on related committees and advisory boards
• Broad E&O coverage provided beyond the cope of activities performed for the funds
• Final adjudication required for intentional acts to be excluded from coverage
• Contractual liability exclusion does not apply to private equity activities as defined by the policy
• No "hammer clause"
• Portfolio company outside directorship runoff not limited to the remainder of the policy period
• Estate, representative, spousal coverage is automatically granted
• Full prior acts coverage
• Worldwide coverage
• Covers punitive, exemplary and multiplied damages, if allowed by applicable law

Limits of up to $15 million are available on both a primary and excess basis. The policies are written through Houston Casualty Company or U. S. Specialty Insurance Company on both an admitted and surplus lines basis. Both insurance carriers are rated A+ by A. M. Best Company and AA by Standard & Poor's.