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Mutual Funds

In the late 1960s, there were almost $50 billion in mutual fund assets.  Today, there is a little over $11 trillion.  The industry has seen a major boom over these last 50 years.  With this type of accelerated growth comes more liability concerns.

The investment advisor/mutual fund policy provides the options of advisor’s professional liability coverage, mutual fund D&O, mutual fund E&O coverage or any combination under one policy.  This type of policy will respond to claims against the investment advisor or fund and any of their employees for failure in the performance of their professional duties.

The claims most often made against Directors & Officers of Mutual Funds arise from:

  • A failure to detect theft of fund assets that causes a loss to investors

  • A failure to properly report facts about the fund’s operations or investment

  • A failure to understand and act upon pertinent developments or important information that causes a loss to investors

  • Charging excessive fees that are beyond the norm of a similar mutual fund

  • Failure of a representative of the fund to explain options or charges to a fund that causes a loss to investors

  • Investing in stocks, bonds or other instruments that do not meet the stated objectives of the mutual fund

Many underwriting factors come into play when a mutual fund complex is looking for an insurance company that will want to cover its risk.

Our experience of working at a mutual fund company helps us understand your issues and appreciate concerns, which ensures we get your company covered the best way possible.

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