Wed, Jul 30, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund managers, law firms eyeing unique insurance to mitigate risk of life’s black swans

Wednesday, August 24, 2011
Opalesque Industry Update - New York insurance advisor SKCG Group sees best market in 25 years for group personal excess liability insurance

Group personal excess liability insurance is finding fans among hedge fund and private equity executives, partners at law firms and other wealthy individuals concerned that their deep pockets make them targets for multi-million dollar lawsuits. Demand for this insurance which provides protection above and beyond the limits of their other liability policies has soared in the last three years and is higher than at any time in the last quarter century, according to SKCG Group, the risk management and insurance advisor to some of the world’s largest hedge funds.

“Many hedge fund managers and legal professionals feel like they have a bull’s eye on their back, and there is no ‘off-the- rack’ insurance policy that can fully protect them,” says Richard Baskind, Vice President and head of Private Client Services at SKCG Group. “Many of these people need more protection than the market is willing to sell them, so they are turning to group personal excess liability policies to find that extra security.”

Group personal excess liability insurance can be purchased by hedge funds, private equity funds and other firms for groups of 10 or more. After losses from a lawsuit have exceeded the relatively small limits already in place on traditional automobile, homeowner’s or umbrella liability policies, this insurance can help provide financial protection from up to $50 million in claims resulting from the unpredictable calamities, or “black swans,” of daily life—the summer house guest who drowns in the pool, the neighbor’s child injured on defective playground equipment, the tree in the front yard that falls across the road onto a passing car, killing the driver. With the average amount of lawsuit awards having increased dramatically over the past decade and the maximum coverage provided by traditional policies not keeping pace, the difference between what the regular insurance covers and the claims can be substantial.

While it is possible to buy individual excess liability policies, group plans cost 30% to 70% less, according to SKCG’s Baskind. On average, says Baskind, an individual can purchase $25 million in coverage for $3,000-$4,000 in a group plan versus $10,000-$12,000 for an individual policy. Another reason managers tend to favor group plans is that even those with a history of making claims on their policies can obtain coverage in a group when they may have been rejected as an individual. These plans are most popular with financial services companies, law firms, medical groups and real estate firms.

“Managing risk starts by understanding how random risk can be. Group personal excess liability insurance lets hedge fund managers and other high net worth individuals worry less about these potential pitfalls,” commented Richard Canter, COO of SKCG Group.

(press release)


SKCG Group is one of the largest privately-held insurance and risk management advisory firms in the United States. www.skcg.com


Bg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Events – AIMA Australian Hedge Fund Forum, Sept. 16, Sydney[more]

    AIMA Australia invite you to join us at our annual Hedge Fund Forum on Tuesday 16th September 2014 at the Sofitel Sydney Wentworth. The AIMA Australian Hedge Fund Forum is a non-profit hedge fund conference organised by the industry for the industry, featuring quality Australian and internation

  2. Opalesque Roundtable: Success in hedge fund marketing not linked to performance, but investor appetite[more]

    Komfie Manalo, Opalesque Asia: Success in marketing a fund is not linked to the performance, but to investor appetite, to the way you can market the fund, and to how much time you can spend to raise assets, said Antoine Rolland, the CEO of incubator and seeding firm

  3. Hedge fund manager Winton Capital making headway with long-only strategy[more]

    From PIonline.com: North American investors are helping Winton Capital Management Ltd. make progress — albeit slowly — toward its founder's goal of becoming a $100 billion company. The firm's ticket to quadrupling its assets under management is unlikely to be one of its scientifically designed manag

  4. Opalesque Radio: Now is a good time to buy protection cheaply in the options market[more]

    Benedicte Gravrand, Opalesque Geneva: Investors are showing an increased interest in risk parity funds and strategies, Opalesque reported last year. Risk parity strategies have the

  5. The Big Picture: Charlemagne Capital smoothes risk out of frontier market investing with portfolio approach[more]

    Benedicte Gravrand, Opalesque Geneva: Opalesque recently talked to one of the portfolio managers of the Oaks funds, which are emerging and frontier market hedge funds focusing on equity long/short with a directional approach. They are run by