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Venture capital liability insurance

Give yourself the freedom to focus on unlocking the potential of high growth startups and let us take care of the risk. Ambitious companies can make mistakes and you could find yourself liable. Our cover can provide essential support in key situations to protect you.

Designed for VCs

  • Portfolio board positions
  • Breach of investment mandate
  • Allegations of negligence
  • Regulatory investigations
  • Misrepresentation
  • Legal defence costs

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Why Superscript?

1

We stay ahead of risk

We have found certain liability insurance policies are too generic and you may discover your current policy doesn’t offer protection against more recent risks. Your portfolio companies are likely at the cutting edge, innovating to change the way we do things. We are specialists in protecting emerging risks and our health check review process will ensure both you and your portfolio companies are safe and protected.

2

Ultimate flexibility

Even if you’re already covered - and don’t want to start from scratch, we can help you fill in the gaps, so you can start by getting the cover you’re currently missing. Like all our insurance products, your premium can be split into monthly instalments to suit you.

3

A small, dedicated team

Our dedicated enterprise team can work with you to understand the risks you face, make recommendations for efficient cover, and help you to set insurance standards for the firms you invest in. You’ll benefit from the expertise of a dedicated account manager who understands you, your company and your insurance needs. If you need to claim they will be there to support you and guide you through the process.

What cover do you need?

Superscript specialises in understanding and sourcing cover for complex risks faced by fintechs. Below, we've summarised some of the most common covers required by VCs.

Professional indemnity insurance

This covers claims made against you for actual or alleged acts, errors, omissions, advice, misstatement, misrepresentation, neglect, or breach of duty.

For example, if a disgruntled investor were to make a claim against you, due to your fund’s under-performance, mismanagement, errors, or omissions.

Our cover can extend to include LP and GP entities as well as advisory boards, making sure all areas of your activities are covered.

Directors liability

This part of the policy is designed to cover claims made personally against directors, in association with their role. Typical claims of this kind tend to be (but are not always) linked to performance.

For example, an investor may decide to allege mismanagement and claim against you individually as a way to recover lost funds. Regulators, too, may launch investigations into a fund’s administration. Directors of FCA regulated firms are accountable under the Senior Managers and Certification Regime (SM&CR). Insurance can protect you from this risk.

Crime

Cover for losses from crime, whether committed by an employee or non-employee, including loss of your funds or funds that you are responsible for, following a financial crime.

Some examples of this are: a disgruntled employee siphoning money from the fund; a fraudulent email impersonating the CEO, or a company seeking investment using forged documents.

Cyber liability

Many policies don’t include this cover, but it’s an important cover for the vast majority of businesses. If you’re using email to exchange sensitive information with your clients or other stakeholders, cyber and privacy liability is relevant for you.

The GDPR dictates how a data breach should be handled, any deviation from these rules can be costly. A cyber policy will not only cover breach costs, but most insurers now include a breach response service which will give you access to specialist legal advice.

Frequently asked questions

What limit should I buy?

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.

What information do I need to provide?

  • 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

How much does it cost?

The cost of cover will vary greatly depending on a number of factors. It’s best to speak to a specialist, who should be able to give an accurate estimate of costs after a brief call or meeting.

Some areas that will affect your rate are the following:

  • The amount of turnover you generate and where in the world you operate
  • The FCA permissions you have
  • Investment strategy
  • Your experience

Who could potentially claim against me?

  • Investors
  • Directors or employees of portfolio companies
  • Lenders
  • Minority shareholders
  • Sellers and buyers of portfolio companies
  • Portfolio company creditors and liquidators
  • Portfolio company customers

A portfolio company is about to IPO. Is there anything else I should consider?

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.

What cover should our portfolio companies have?

All your portfolio companies should be purchasing 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.

We insure thousands of innovative businesses

What our clients say

From the very beginning of the process, Superscript were knowledgeable and professional, and managed to come up with the right policy for us under very tight time frames. We will recommend them to other startups and scaleups.

Fintech

Superscript were great in helping us get coverage for our AI skin cancer service. We had spoken to a number of brokers as we tried to get insurance for our AI but ultimately, none were able to get underwriters around the table to understand the business and coverage needed. Superscript did that and then helped create a new policy type to get us the coverage we needed. Recommend.

CEO, Medtech

We had a breach and the insurance and legal support we got was invaluable. Superscript walked us through the whole thing including media and customer relations.

Founder, ID verification service

It was very quick and easy to claim. Our account manager replied within minutes, confirmed the details and we had the money in our account within 48 hours.

COO, HR technology platform
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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.

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