The cost of missing the connection between them almost always surfaces after a claim, not before.

Why the Three Layers Have to Be Mapped Together

Liability inside a VC or PE fund does not flow through a single risk profile. It moves through three distinct layers, and each one needs its own cover.

The first is D&O liability at the fund level. General partners (GP) face claims tied to how they govern the fund. The second is D&O liability at the portfolio company level, where partners who take board seats carry the same director liability as any other director. Professional liability at the manager entity level is the third, where the firm carries exposure for the investment activity it conducts on behalf of the fund.

Each of these exposures sits under a different policy, with different triggers and different limits. When the three sit alongside each other without reference, gaps appear between them. Policies that look complete in isolation can leave the same risk uninsured across the gap, or duplicate coverage in a way that wastes premium without removing exposure.

A properly mapped programme treats the three layers as one continuous structure. Each layer protects against a specific category of liability, and together they account for the way Director and Officer (D&O) and Professional Indemnity (PI) risk actually moves through a VC or PE fund operating across Singapore, Hong Kong, and the wider region.

Fund-Level GP D&O: The Layer That Covers the Fund Itself

Fund-level GP D&O protects the general partners and the fund entity against claims arising from how the fund operates. This is the layer that responds when an limited partner (LP) brings a claim against the GP for breach of fiduciary duty, misallocation of capital, or any other decision tied to fund governance.

In APAC, where many funds register in one jurisdiction but invest across several others, the wording has to account for cross-border claim triggers. A policy that responds well in Singapore may not respond to a claim brought in another regional jurisdiction. The wording, the territorial scope, and the definition of insured persons all have to reflect where the fund actually carries exposure.

GP D&O is also where the entity-level liability of the fund sits. Without it, a claim against the fund itself, rather than against any individual, can fall entirely outside coverage.

Portfolio Company D&O with Side A Protection

The second layer sits at the portfolio company level. Every portfolio company that a fund’s partners join as a director carries its own D&O policy, and the partner relies on that policy for protection during their time on the board.

The risk most VC partners underestimate is that the portfolio company’s D&O limit covers the whole board collectively. Founders, executives, independent directors, and investor directors all draw from the same tower. In a multi-defendant claim, the limit can run out before it ever reaches the investor director. Side A protection becomes the part that matters most at that point. It responds personally to the named individual when the company can no longer indemnify them, which is often exactly when an insolvency or a derivative action puts a partner under personal exposure.

For APAC VC funds, the portfolio is rarely homogeneous. A single fund may have partners sitting on boards in Singapore, Hong Kong, Thailand, and Japan, each under a different portfolio company D&O policy with different wordings. Mapping these seats against the fund’s other cover is the only way to see whether each board role a partner holds actually carries protection.

Professional Liability for the Manager

The third layer is the one most VC firms underestimate. It is professional liability, and it attaches to the manager entity rather than to the fund or to any individual director.

A VC manager is a professional services firm. It makes investment decisions, conducts due diligence, monitors portfolio companies, and reports back to investors. Every one of those activities creates a potential claim. An LP may allege that due diligence fell short. Regulators may question how the manager met its obligations. A third party may bring a claim tied to how the manager carried out its role. None of these sit cleanly under fund-level D&O or portfolio company D&O, because the allegation is about the manager’s professional conduct, not about fund governance or a board seat.

For APAC fund managers, the licensing environment sharpens this exposure. The regimes under the Monetary Authority of Singapore and the Securities and Futures Commission in Hong Kong impose specific obligations on the manager entity, and regulatory investigations into how the manager met those obligations tend to target the manager directly. A programme that only insures the GP and the portfolio companies leaves the manager to absorb the cost of responding on its own.

Investment Management Insurance for the Manager Entity

Investment Management Insurance, or IMI, is the policy that ties the full coverage programme together. It responds when the claim is about how the manager performed its role, rather than about a specific portfolio investment or a fund governance decision, and in doing so it connects the layers that sit above and below it. Where GP D&O addresses the conduct of individuals in their fiduciary capacity, and portfolio company D&O addresses decisions made at the operating level, IMI occupies the space in between and ensures that professional liability at the manager entity level does not fall through the gaps between those two covers.

A generic professional indemnity policy rarely fits a VC manager well. The wording usually suits a different kind of professional services firm and does not contemplate the specific activities of fund management. IMI follows what a manager actually does, which is why it integrates more naturally into a fund insurance programme than an off-the-shelf PI policy would. It speaks the same language as the other layers rather than sitting alongside them as an awkward addition.

That integration is what makes IMI more than a residual cover. Without it, the manager entity carries professional liability with no policy designed to respond. With it, the programme has coherence: each layer addresses a distinct exposure, and IMI is what ensures those layers function as a whole rather than as three separate policies that happen to coexist.​​​​​​​​​​​​​​​​

How Continuum Can Help

Continuum advises APAC VC funds on D&O and professional liability programmes that work as a single structure rather than three disconnected policies. We review GP D&O wordings, portfolio company D&O across every seat the fund holds, and Investment Management Insurance terms, and we identify the gaps and duplications that emerge when the layers do not map together.

If you are running a fund across APAC and you have bought your cover piece by piece rather than designed it as a programme, we can help you see where the gaps actually are. Get in touch with us here.