insurance coverage

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In addition to the normal operational and legal risks associated with owning and managing portfolio companies, 2025 has introduced or exacerbated a wave of geopolitical and macroeconomic risks such as inflation, tariffs, trade, depressed consumer sentiment, political risks, and credit risks. The resulting, increased risks faced by portfolio companies has caused a need for private equity sponsors to focus more closely on the insurance maintained at the portfolio company level, and not only the sponsor’s own policies. It is critical for sponsors to work closely with management of their portfolio companies, insurance brokers, and experienced coverage counsel to review and negotiate strong insurance for their portfolio companies. Savvy sponsors are able to utilize their leverage to negotiate bespoke, manuscript policy forms that can be used across their portfolio to provide consistent, strong protection for each of the sponsor’s portfolio companies.

A cyber breach can have serious legal, financial, and reputational consequences for a fund sponsor, as described in our previous post. As such, cybersecurity threats must be treated as business risks, not just a potential IT problem. Senior management at fund sponsors should take the lead to ensure that the sponsor is taking appropriate actions to protect itself against cyber risks. There are several steps that senior management can guide the fund sponsor to take to prevent breaches from occurring and to mitigate the impact when they do occur.

“A Fund Managers’ Guide to Maximizing D&O and E&O Insurance Coverage” examines best practices for fund managers—particularly in the current economic climate—for negotiating and obtaining strong insurance protection and maximizing recovery when claims arise. As the economic impact of COVID-19 continues to reverberate across all global industries, there is an…