Venture Capital Insurance

Venture Capital Insurance has evolved over the years as has corporate insurance for officers and directors in general. Most corporations, even fairly small ones, understand the importance of having adequate insurance to protect against loss resulting from the negligence of officers and directors. Investment firms understand that having good venture capital insurance not only protects the officers and directors they are standing behind from possible personal liability, but it also helps protect their firm. They require companies they invest in to carry similar coverage, so it is easy to see why VC firms will protect themselves as well.

Just attorneys fees required to adequately defend a claim, can easily run into the hundreds of thousands of dollars, and even millions if the claim is a class action. This isn’t even counting the costs and expenses of such claims and the amount that might have to be paid out if the corporation loses the case, decides to settle out of court because of the possible loss it may suffer, or the incalculable damage to its business reputation.

This type of insurance is also sometimes referred to as Professional Liability Insurance or Corporate Liability Insurance. The way the insurance works is that it is supposed to cover the errors and omissions of the officers and directors while acting in their corporate capacity on behalf of the corporation. It does not cover fraud or intentional acts of misconduct.

Chubb Insurance offers an array of coverage well-suited for professional liability coverage. It is of course always wise to compare rates and coverage before making any decision regarding insurance. For more information visit Venture Capital Insurance - Chubb Specialty Insurance.

For some additional information you might also want to check out Venture Capital Tips. It contains several very useful tips you should know when dealing with VC firms in terms of preparation, deal structure and negotiations.