Travelers offers cover for investment advisors

St. Paul Guarantee Insurance Company (Travelers) has introduced a new policy to give added protection to investment advisers, mutual funds and hedge funds for risks associated with providing asset management products and services to investors.
“Investment advisers, mutual funds and hedge funds have come under increased regulatory scrutiny over the last few years and, as a result, these groups are recognizing that they require coverage to address the wide variety of risks they face,” according to Phil Baker, vice president of financial and professional services at Travelers.
The company announced the new release at a Collingwood, Ontario symposium.
The policy, entitled Travelers SelectOne(SM) for Investment Advisers and Funds, is designed to help investment advisers, mutual funds and hedge funds deal with exposures they might incur through business interactions with investors, employees, shareholders, governmental agencies and pension plan participants.
Specifically, the policy provides coverage for the following incidents:
Failure to adhere to investment guidelines and restrictions;
Misrepresentations and failure to adequately disclose risks;
Mismanagement of investments by an adviser on behalf of a pension fund;
Breach of fiduciary duties to clients or pension plan participants; and
Unintentional errors committed in the course of performing regular investment adviser duties.
Travelers SelectOne(SM) for Investment Advisers and Funds includes an option to select products such as Investment Advisers Professional Liability, Mutual Fund Liability, Employment Practices Liability, and Fiduciary Liability.
Separate coverage can be purchased for fidelity and crime exposures under a financial institution bond or a fiduciary dishonesty bond. Coverage is also available for kidnap and ransom risks.
Travelers has been underwriting mutual fund investment advisers and funds in the United States since 1988.