Venture capital insurance
The risks facing venture capitalists today are varied and multifaceted. Coincidentally, the same goes for our advised insurance solutions.
I was going with another company for our insurance and then started the discussion with Jack on your team. He was fantastic, made me want to work with Superscript. Such a great experience from end to end and will be recommending to all new manager friends.
Harry Stebbings, Founder, 20VC
Venture capital FAQs
Your current broker should be able to share industry benchmarking information and help you find an appropriate limit of cover. You should also speak with a compliance specialist to identify any compulsory limits you need to purchase. You may also be contractually obliged by investors to purchase a certain limit, your broker should be able to assist you in identifying these requirements.
If you’re an Alternative Investment Fund Manager (AIFM) there are compulsory insurance requirements you need to consider. One of our team can discuss this with you to calculate the appropriate limits.
- Value of the companies or assets within your portfolio
- Performance information for assets including Initial Rate of Return (IRR), or similar
- Qualifications and experience of managing partners
- Structure chart (if you have more than one entity)
- Completed proposal form
Premiums are calculated using a number of factors, meaning the cost of cover varies greatly. Our specialists should be able to give an accurate estimate of costs after a brief call or meeting.
Some areas that will affect your rate include:
- The amount of turnover you generate and where in the world you operate
- The FCA permissions you have
- Investment strategy
- Your experience
- Directors or employees of portfolio companies
- Minority shareholders
- Sellers and buyers of portfolio companies
- Portfolio company creditors and liquidators
- Portfolio company customers
Most policies will include a ‘Prospectus Liability Exclusion’, which excludes any cover that would arise out of your portfolio company undergoing an IPO. We can provide a specific Public Offering of Securities Insurance (POSI) to protect you in the event that claimants allege misinformation or misrepresentation in your prospectus, pathfinder or final admission documentation.
All of your portfolio companies should purchase their own directors' and officers' insurance. This will be a first line of defence for your company directors. This reduces the risk of claims against your own directors' and officers' insurance and demonstrates effective risk management resulting in savings on your own cover. We strongly recommend that all portfolio companies purchase their own, separate professional indemnity and cyber insurance for the same reasons.
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Authorised by the FCA
The FCA supervises UK financial services firms to protect consumers. We are directly authorised and regulated by the FCA and our Firm Reference Number is 656459. These details can be confirmed on the Financial Services Register at www.fca.org.uk or by calling the FCA on 0845 606 1234.
Protected by the FSCS
If you are a business with an annual turnover under £1m, charity with an annual income under £1m, or trust with net assets under £1m, then you will be entitled to compensation from the FSCS in the unlikely event we cannot meet our obligations. Full details and further information on the scheme are available at www.fscs.org.uk.