Venture Capital Asset Protection
Tailored Insurance for Venture Capital and Private Equity Firms
Venture capital and private equity firms perform a wide range of business activities.
These activities can include financing a portfolio company, serving on a portfolio company’s
board of directors, exiting a portfolio company position, and nearly everything in between.
This wide array of activities creates a host of unique personal and business exposures that
can seriously threaten a firm’s bottom line and the financial security of the individuals
who perform these functions.
Fortunately, Chubb’s Venture Capital Asset Protection (VCAP) policy offers venture capital
and private equity firms an effective, comprehensive way to transfer and mitigate many of
their most significant liabilities by combining four coverages into one policy:
I Management Liability Insurance
I Management Indemnification Insurance
I Outside Directorship Liability Insurance
I Professional Services Liability (Errors and Omissions) Insurance
Who is covered?
The VCAP policy offers protection for the venture capital and private equity firm’s
past, present, and future:
I General partners I Private funds
I Managing members I Private fund management entities
I Directors and officers I Management company
I Equivalent executives of the above I Subsidiaries
I Employees I Investment holding companies
I Advisory board members
Chubb purposely designed the policy to address those organizational structures
typically used by venture capital and private equity firms:
I Limited partnerships I Limited liability companies
I General partnerships I Stock corporations
I Limited liability partnerships
Chubb Group of Insurance Companies
Furthermore, Chubb’s VCAP policy effectively addresses the needs of many types of private investment
firms that manage other types of funds, including:
I Small business investment company funds I Corporate-sponsored funds
I Fund of private equity/venture capital funds I Distressed debt funds
I Mezzanine debt funds I Government-sponsored funds
Policy addresses professional services liability, including:
I Formation, capitalization, operation, and management of a private fund.
I Lender liability for those situations when permanent or temporary credit vehicles are more appropriate
investments for a portfolio company.
I Customary financial and strategic advice given to develop portfolio companies.
I Portfolio company liquidity events, such an IPO, a sale, bankruptcy, insolvency, mergers, or acquisitions.
I Portfolio company financings or buyouts.
Policy addresses outside directorship liability, including:
I Automatic coverage for outside directorships on not-for-profit and private portfolio companies.
I Automatic 30 days’ insurance for outside directorships on publicly listed portfolio companies
(options for longer coverage periods are available on a scheduled basis).
I Automatic run-off coverage for insured persons who cease serving on any outside board position.
Claims-made policy form featuring:
I Worldwide coverage.
I Coverage for suits brought by portfolio companies against the venture capital or private equity firm or its
employees or management.
I Coverage for liabilities arising from activities related to past, present, and proposed portfolio companies.
I Coverage for securities actions.
I Controlling shareholder liability coverage.
I Coverage for advisory board members of a private fund.
I No exclusions for tortious interference, intellectual property, or antitrust.
I Automatic coverage for newly created private funds.
I Insured has the right to choose its own legal counsel (subject to Chubb’s approval).
I Advancement of defense costs.
I No prior-acts exclusion.
I Extended reporting period option.
I Non-cancelable policy, except for nonpayment of premium.
Commitment and expertise—In 1997, Chubb was the first insurer to develop an integrated management and
professional liability insurance product tailored for venture capital firms. Our in-depth understanding of these
firms and our experience allow us to continually enhance our VCAP policy to keep pace with evolving legal
Capability—With dedicated financial institution underwriters in all of the world’s major financial centers,
Chubb’s ability to understand and react to the complex risks venture capital and private equity firms face is rare in
Global reach—Chubb insures the business activities of venture capital and private equity firms around the world
whether they or their private funds and portfolio companies are located in one country or several.
Market leadership—Our customers select us to be the primary insurance carrier on more than 90% of the VCAP
insurance programs we place, setting us apart from other insurers.
Superior service—Chubb’s reputation for service and fair claims handling is known around the world. Agents
and brokers consistently rate Chubb’s quality of service among the best in the insurance industry.
Financial strength—Chubb consistently earns high ratings for financial stability from A.M. Best Company,
Moody’s, and Standard & Poor’s. For more than 50 years, Chubb has remained part of an elite group of insurers
that have maintained Best’s highest ratings.
The activities and exposures of venture capital and private equity firms continue to evolve, and the need for a
comprehensive insurance program that can address them is more apparent than ever. To learn more about Chubb’s
VCAP policy, contact your trusted agent or broker or visit us at www.chubb.com.
For promotional purposes, Chubb refers to the member insurers of the Chubb Group of Insurance Companies
underwriting coverage: Chubb Insurance Company of Europe, S.A.; Chubb Insurance Company of Australia,
Limited; Chubb Indemnity Insurance Company; Chubb Insurance Company of Canada; Chubb Argentina de
Seguros, S.A.; Chubb do Brasil Companhia de Seguros; Chubb de Chile Compañia de Seguros Generales, A.S.;
Chubb de Colombia Compañia de Seguros, S.A.; Chubb de Mexico Compañia Afianzadora, S.A. de C.V.;
Chubb Group of Insurance Companies Chubb National Insurance Company; Federal Insurance Company; Great Northern Insurance Company;
Northwestern Pacific Indemnity Company; Pacific Indemnity Company; Vigilant Insurance Company; Executive
Warren, NJ 07059 Risk Indemnity Inc.; Executive Risk Specialty Insurance Company; and Quadrant Indemnity Company. Not all
insurers do business in all jurisdictions.
This literature is descriptive only. Actual coverage is subject to the language of the policies as issued.
Form 17-01-0100 (Rev. 9/06)