Wednesday 8 June 2011

Importance of Hedge Fund Insurance

By John Smith


Hedge fund insurance is a must in order for you to protect yourself and your investor; Errors and Omissions insurance is one of the most basic ways to do this. Error and Omissions insurance is a necessity for all hedge fund operators, but not in the manner that you might first expect. Your first response might be to purchase E&O insurance in the full value of your fund. But it is impractical to insure the entire amount that you have within your fund. This is because of the fact that this would be extremely expensive and counterproductive to the main goal of your fund: making money for yourself and your investors.

Rather than trying to protect the entire amount invested within your hedge fund, you should cover just the amount necessary to protect yourself defensively from a lawsuit. You want to be able to defend yourself in the case that you are brought to court. The major benefit of this type of hedge fund insurance is that you will not need to liquidate some or all of your fund in order to protect yourself in court. Facing a law suit is an expensive task; you do not want to lose your livelihood because of a mistake or an oversight.

You want the freedom that comes with a classic auto insurance policy. For example, just as with traditional auto insurance, you can choose from an array of different deductibles. A higher deductible will ultimately get you a lower monthly or yearly rate. As a collector, you will definitely want to assess whether or not you wish to have a high deductible and a lower rate, or a lower deductible and a higher rate. There are many factors to consider when making this decision; enlisting the help of a classic auto insurance agent will be of great value to you. With their experience and background, these professionals are trained to help you find the most appropriate and most affordable option.

Classic auto insurance is a necessity. You need to find a policy that will give you the best coverage at the best price. These things might seem contradictory, but it is quite policy to find the policy you desire at a price that is more than reasonable.

Shopping around will be of great use to you as will having telephone or face to face meetings with an insurance professional. Having a pros and cons list of the policies you are considering can also help. You want to maximize the gains that you will be getting in the form of protection, all the while making sure they outweigh the cons that will arise-namely the insurance premiums that you will be responsible for.




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