Directors must check policies for sub-limits

It has come to our attention that a number of insurers have introduced a regulatory investigation sub-limit onto their directors’ and officers’ policies.

For directors of hedge funds with policies under this restriction, this means that, should the fund be subjected to an investigation by the FSA or SEC, they would be personally liable for any excess legal or other costs.

With expected increases in regulatory investigations, hedge fund directors could find their D&O policies woefully inadequate when they come to make a claim.

Directors would be well advised to check that their policies do not include this sub-limit. Any directors unsure as to the suitability of their existing cover should contact a specialist hedge fund D&O broker for advice.

Ben Hancock
Director,
Howden hedge fund team,
London