Independent Directors Liability Insurance

This policy was created to provide Mutual Fund Directors with an additional level of protection when primary insurance or indemnification cannot or will not respond. Extensive protection includes a dedicated first-dollar excess Side A limit for non-indemnifiable claims and a Difference in Conditions (DIC) feature to fill certain gaps found in traditional primary D&O policies.

Key coverage features

• Claims made policy that drops down as primary coverage to fill certain coverage gaps resulting from exclusions commonly found in traditional primary D&O policies (DIC feature)
• Dedicated excess Side A limit for the Directors or Independent Directors that is not shared with the Mutual Fund
• Protection when primary coverage refuses to perform in a timely manner or does not respond
• Vicarious liability coverage by virtue of a Director or Independent Director acting in the capacity as such
• Ability to elect blanket coverage for all Directors of the Mutual Fund family or solely for the Independent Directors
• Broad definitions of Claim and Wrongful Act
• Explicitly provides coverage for employment-related matters against Insured Persons in connection with any Insured Person’s duties under Rule 38a-1.a.4.i and Rule 38a-1.a.4.ii. of the Investment Company Act of 1940
• Expansive definition of Loss that includes pre-judgment and post-judgment interest
• Coverage for punitive or exemplary damages and the multiple portion of any multiplied damages, where insurable, on a most favorable jurisdiction basis
• Full severability of the exclusions and the Application
• Fully non-rescindable
• Automatic coverage provided with respect to newly formed fund series or portfolios
• No pollution exclusion
• No ERISA exclusion
• No failure to maintain insurance exclusion
• Insured Persons retain the duty to defend Claims
• Defense Costs advancement provision where not advanced by other insurance or indemnified by any Mutual Fund, sponsor of any Mutual Fund or service provider to any Mutual Fund
• 60-day automatic reporting period
• Bi-lateral Extended Discovery Period, with a 12-month minimum
• Coverage for estates, legal representatives, and spousal and Domestic Partner liability
• Non-cancelable except for non-payment of premium (where allowed by law)
• Worldwide coverage

Click here to download an application for Independent Directors Liability Insurance.