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Frenkel & Co., Inc. Company
Question: We're launching a new fund. What coverage do we need?
Answer: Most start-up funds only need two or three basic policies on "day one":
Office Package Policy
Sometimes also referred to as a "BOP" or Business Owners Package, this policy provides Commercial General Liability ("CGL") coverage required by most landlords, as well as property coverage for your office furniture, computers, and improvements made during the build-out of the space.
If your landlord requires a liability limit of more than $1,000,000 per occurrence, then you will also need an Umbrella Liability policy. An Umbrella Liability policy, purchased in increments of $1,000,000, provides additional limits over the first $1,000,000 provided by the CGL policy.
Workers' Compensation
In most states the members or partners of the adviser entity are not required to be covered by Workers' Compensation. But once you hire your first employee, you will be required to purchase Workers' Compensation Insurance, as this is a mandatory coverage for employers in most states. Workers' Compensation provides statutory medical benefits and indemnity for lost wages for work-related injuries to employees.
Short-term Disability
Some states, notably New York, require that all employers purchase Short-term Disability Benefits ("DBL") coverage. DBL provides statutory benefits to employees for non-employment related injuries, including maternity.
The above coverages represent the bare minimum required policies most funds need on "day one". After the initial start-up period, other coverages should be considered:
