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. 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.