Insurance for Hedge funds & Private Equity

Key risks

Common industry risks

Understanding the risks in your industry and how our comprehensive coverage responds to protect your business.

The Risks

Risks Response

Employment Practices Liability

A staff member alleges unfair dismissal, workplace bullying, harassment or discrimination and pursues a formal claim for compensation.

Employment Practices Liability Insurance may respond to claims arising from alleged unfair dismissal, bullying or discrimination by employees.

Cyber Insurance

A phishing or ransomware event exposes investor data and disrupts your investment systems and business operations.

Cyber Insurance may respond to breach response costs, ransom payments, legal expenses, damages and regulatory penalties.

Investigation Costs

A formal regulatory inquiry is commenced into your professional activities, client records or conduct, resulting in significant legal costs.

Investigation Costs is a benefit commonly included in Professional Indemnity Insurance, which may cover legal expenses arising from a regulatory inquiry.

Financial Institutions Insurance

An employee or third party uses forged transfer requests or false identities to divert or misappropriate capital from the fund.

Financial Institutions Insurance may respond to direct financial loss arising from employee dishonesty, fraud, forgery or fraudulent instructions.

Professional Indemnity

A deal, valuation or portfolio oversight issue is alleged to cause investor or fund losses, and a compensation claim is made.

Professional Indemnity Insurance may respond to claims of alleged negligence or errors in your professional services, including defence costs.

Employment Practices Liability

The Risks

A staff member alleges unfair dismissal, workplace bullying, harassment or discrimination and pursues a formal claim for compensation.

Risks Response

Employment Practices Liability Insurance may respond to claims arising from alleged unfair dismissal, bullying or discrimination by employees.

Cyber Insurance

The Risks

A phishing or ransomware event exposes investor data and disrupts your investment systems and business operations.

Risks Response

Cyber Insurance may respond to breach response costs, ransom payments, legal expenses, damages and regulatory penalties.

Investigation Costs

The Risks

A formal regulatory inquiry is commenced into your professional activities, client records or conduct, resulting in significant legal costs.

Risks Response

Investigation Costs is a benefit commonly included in Professional Indemnity Insurance, which may cover legal expenses arising from a regulatory inquiry.

Financial Institutions Insurance

The Risks

An employee or third party uses forged transfer requests or false identities to divert or misappropriate capital from the fund.

Risks Response

Financial Institutions Insurance may respond to direct financial loss arising from employee dishonesty, fraud, forgery or fraudulent instructions.

Professional Indemnity

The Risks

A deal, valuation or portfolio oversight issue is alleged to cause investor or fund losses, and a compensation claim is made.

Risks Response

Professional Indemnity Insurance may respond to claims of alleged negligence or errors in your professional services, including defence costs.

Important: Scenarios are examples only. Coverage is subject to policy terms, conditions and exclusions. Limits and sub-limits might apply. Policy wordings vary between insurers. Refer to the PDS or Policy Wording for details.

Claim examples

Hedge funds & Private Equity claim examples

Real-world examples of how our insurance helps protect hedge funds and their clients

Conflict of Interest Allegation

SCENARIO

Investors allege the fund manager failed to properly manage conflicts between related entities, leading to financial disadvantage.

WHY IT’S COVERED

Depending on who the claim is brought against, Professional Indemnity Insurance, Directors and Officers Insurance or Investment Manager Indemnity Insurance may respond to claims arising from alleged conflicts of interest or breach of fiduciary duty.

Regulatory Inquiry

SCENARIO

ASIC commences an inquiry into governance and compliance practices following investor complaints. Legal advisers are engaged to respond.

WHY IT’S COVERED

Professional Indemnity Insurance may respond to legal costs and expenses arising from a regulatory investigation into your professional activities."

Offering Document Misstatement

SCENARIO

An error is discovered in a private equity fund’s information memorandum. Investors claim they relied on the document and seek compensation for losses.

WHY IT’S COVERED

Professional Indemnity Insurance may respond to claims arising from alleged misstatements or omissions in professional disclosures, including defence costs and compensation.

Strategy Deviation Claim

SCENARIO

Investors allege a hedge fund manager departed from the stated investment strategy, resulting in losses during volatile market conditions. Legal action is taken against the management entity.

WHY IT’S COVERED

Professional Indemnity Insurance is designed to respond to claims arising from alleged negligence, errors or omissions in your professional services, including defence costs and compensation.

SCEANRIO

A support worker gave a participant the wrong medication due to a mislabeled pillbox. The participant experienced severe drowsiness and dehydration, requiring overnight hospitalization.

WHY IT'S COVERED

Costs included $8,200 for hospital and rehabilitation, $12,500 for legal defence, and a $7,500 settlement to resolve the claim out of court.

Conflict of Interest Allegation

SCENARIO

A support worker gave a participant the wrong medication due to a mislabeled pillbox. The participant experienced severe drowsiness and dehydration, requiring overnight hospitalization.

WHY IT’S COVERED

Costs included $8,200 for hospital and rehabilitation, $12,500 for legal defence, and a $7,500 settlement to resolve the claim out of court.

SCENARIO

A support worker gave a participant the wrong medication due to a mislabeled pillbox. The participant experienced severe drowsiness and dehydration, requiring overnight hospitalization.

IS THIS COVERED?

Costs included $8,200 for hospital and rehabilitation, $12,500 for legal defence, and a $7,500 settlement to resolve the claim out of court.

FAQs

Hedge funds & Private Equity insurance queries

How do I make a claim?

You should notify your insurer as soon as you become aware of a claim or circumstance that may give rise to a claim which could include a client complaint, you discovering an incident or an allegation of harm. Claims should be made in writing and handled in line with the claims notification requirements which will be outlined in your policy wording.

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How do I make a claim?

What is a Certificate of Currency?

A Certificate of Currency is issued by an insurance company and is something you can use as proof that your existing insurance policy is valid. It contains all the information regarding your policy. You may be asked from time to time to prove your insurance - for loans to your business, for landlords of your premises, or for certain clients you might have. The moment you purchase your insurance from upcover you can send your proof of insurance to whoever requires it, at just a click of a button.

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What is a Certificate of Currency?

How quickly do I need to report an incident to my insurer?

You should notify your insurer as soon as you become aware of any incident, claim, or circumstance that may give rise to a claim. Professional Indemnity insurance typically operates on a "claims made and notified" basis, meaning both the claim must be made against you AND you must notify the insurer during the active insurance period (or discovery period if applicable). Late notification after policy expiry may not be covered unless you have purchased an extended discovery period. Prompt notification is essential to protect your rights under your insurance.

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How quickly do I need to report an incident to my insurer?

What is a retroactive date?

A retroactive date is the earliest date from which a claim can arise and still be covered under your policy. Professional Indemnity and certain other claims-made policies will only respond to claims arising from acts, errors or omissions that occurred on or after the retroactive date listed in your policy schedule. If an incident occurred before your retroactive date, it typically will not be covered even if the claim is made during the current policy period. Maintaining continuous cover without gaps helps protect your retroactive date — check your policy schedule or ask your broker if you are unsure of your retroactive date.

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What is a retroactive date?

What factors might impact the cost of policy premiums of insurance for hedge fund?

The cost of insurance for hedge fund in Australia varies depending on several factors. These typically include the nature and scope of your business activities, annual turnover, number of employees, location, claims history, and the cover limits and the applicable excess. For Commercial Motor cover, insurers also consider vehicle make, model, value, usage and driving history. Where additional covers such as Professional Indemnity or Cyber insurance are relevant to your operations, the services you provide and the sensitivity of data you hold may also affect your premium. Because each business is different, costs can vary significantly and premiums may change at renewal in line with risk and claims experience.

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What factors might impact the cost of policy premiums of insurance for hedge fund?

Do private equity firms need Professional Indemnity insurance?

Professional Indemnity Insurance is designed to cover claims arising from professional negligence, errors or omissions in the services you provide. While it is not a legal requirement for private equity firms in Australia, it is commonly held by private equity firms across Australia. Many clients, professional associations and booking platforms may expect you to hold current Professional Indemnity cover before engaging your services. Without this type of cover, you could be personally liable for legal costs and compensation claims. Speaking with an insurance broker can help you understand the level of cover appropriate for your circumstances.

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Do private equity firms need Professional Indemnity insurance?

Blogs

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Jul 28, 2023

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Professional Indemnity Vs. Management Liability – What Your Business Need? | Upcover

Learn the difference between Professional Indemnity and Management Liability insurance, and discover which one is right for your business. Upcover has got you covered with expert advice and tailored solutions.

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What is Management Liability Insurance & what it covers

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© 2026 upcover Pty Ltd ABN 17 628 197 437, Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters. upcover does not compare all general insurers or insurance products available in the market.

The information contained on this website is general advice only and has been prepared without taking into account your individual needs, objectives and financial situation. It should not be relied upon as advice. All insurance products are subject to the terms, conditions, limits and exclusions contained in the relevant policy wording and Product Disclosure Statement. Before deciding whether a particular insurance product is right for you, please consider your personal circumstances and read the relevant Product Disclosure Statement, Target Market Determination, Policy Wording, and Financial Services Guide.

Insurance for Hedge funds & Private Equity

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Common industry risks

The Risks

Risks Response

The Risks

Risks Response

The Risks

Risks Response

The Risks

Risks Response

The Risks

Risks Response

The Risks

Risks Response

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Coverages for Hedge funds & Private Equity

Hedge funds & Private Equity claim examples

SCENARIO

WHY IT’S COVERED

SCENARIO

IS THIS COVERED?

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Hedge funds & Private Equity insurance queries

How do I make a claim?

How do I make a claim?

What is a Certificate of Currency?

What is a Certificate of Currency?

How quickly do I need to report an incident to my insurer?

How quickly do I need to report an incident to my insurer?

What is a retroactive date?

What is a retroactive date?

What factors might impact the cost of policy premiums of insurance for hedge fund?

What factors might impact the cost of policy premiums of insurance for hedge fund?

Do private equity firms need Professional Indemnity insurance?

Do private equity firms need Professional Indemnity insurance?

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