There’s no straightforward answer to this but we’re here to advise.
Your Financial Conduct Authority (FCA) requirements might determine how much you need. Depending on your FCA permissions it may be compulsory for you to have a minimum level of cover, particularly if you have exposure to consumers. That minimum for consumer related business (advisory) is often £1,850,000.
For larger businesses, you need to weigh up the cost of insurance versus the policy limits purchased and you’ll need to consider several factors, such the services performed, fees charged, types of investors/clients, and previous complaints and claims.
Directors’ and officers’ insurance can be more prescriptive if your firm has external officers that support the functioning of the firm, such as professional investors. Professional investors may insist that the funds managed have a minimum level of directors’ and officers’ insurance linked to the level of investment. It’s also common for those investors to insist upon key person insurance for the lead fund managers.
