Family Office

Why specialized insurance?

Family offices are created by wealthy families to handle numerous and diverse functions. A typical family office might employ professionals to handle everything from investment management, to bookkeeping services and administration, to public relations consulting for the family. Like all directors, officers and professionals, those working for family offices are at high risk of being sued for professional negligence, mismanagement of funds or employment discrimination. Without proper insurance in place, family office professionals could find their personal assets at stake when claims arise or shy away from accepting positions with family offices given the risk of liability. Family Office/Wealth Management Professional Liability Insurance addresses the professional liability of those employed by family offices. It can be underwritten for both single and multi-family offices. Our carrier partners can put together highly customizable policy, so it can encompass virtually any of the professionals that serve a particular family office—from financial and investment advisors, to human resources consultants, to tax preparers, to public relations consultants and more. You as the Insured can choose the professional services to be covered under the policy, so they only pay for the coverage they need. Family Office/Wealth Management Professional Liability Insurance can be combined with Employment Practices Liability and Private Company Directors and Officers Liability Insurance to create one comprehensive management and professional liability solution. Outside Director Liability Insurance is also available for family members or family office representatives sitting on outside boards.

What are the benefits of bundling coverages?

For the family office, it just makes sense to deal with one insurer. Bundling all the coverages that concern a family office—the family office’s business/commercial and professional liability exposures and the property/casualty needs of individual family members—makes for convenience and efficiency. Committing dedicated personnel to the program brings family office administrators further peace of mind.

We believe in streamlining the business of family office and family insurance, giving administrators more breadth, flexibility, choice and control and allowing them to devote more resources to their primary responsibility: enhancement and protection of significant family assets.

Some of the risk transfer policies that a Family Office could secure include:

  • Professional liability insurance which helps protect family office directors, officers and other professionals if family office clients accuse them of breach of fiduciary duty, conflict of interest or professional malpractice as a result of providing inadequate services or making professional errors.
  • Family trust and trustee liability insurance which helps protect a family office trust against acts committed by a trustee employed by the family office, and it helps protect the trustees of all trusts administered, sponsored or advised by the family office.

In addition to these core protections, the optional coverages available, include directors and officers liability, employment practices liability, pension and welfare plan liability and private fund coverage for investment entities. In addition, general commercial insurance helps protect a family office business, including property, general liability, commercial auto, excess/umbrella liability, workers compensation and crime insurance.

Valuable solutions

Some of our partners have responded to the administrative needs family office managers have expressed for single-source solutions. These solutions include:

  • Dedicated claim service teams who are familiar with the family office account and the complexities often associated with these types of property and liability claims. A dedicated toll free number is available to help streamline the family office account claims. Our most experienced claim professionals work with the administrator to resolve claims fairly and expeditiously. We work with carriers that make every effort to respond to claims within hours of its receipt and to pay them within 48 hours of settlement.
  • A statement of account offers the family office manager and agent/broker simplified record keeping and reconciliation, a convenient means of providing each family member with a monthly statement, and provides the family office manager monthly bottom-line accounting for the entire insurance program.

Some of these carrier programs also offer other features including split retention/limit options, marital/heir estates extension, advancement of defense costs in excess of applicable retention amount, reduced retention for certain settlements and worldwide territory coverage. Limits of liability are available up to $10 million.