26 February 2026 | Insight
In the world of investment funds, risk doesn't stop at the individual. While Directors’ and Officers’ Liability(D&O) insurance remains a crucial safeguard for protecting key decision-makers from personal liability, many funds overlook a critical element of their risk transfer strategy: Entity Cover.
D&O insurance is designed to respond to claims and investigations brought against individuals, such as board members and senior executives, for actual or alleged wrongful acts in the performance of their duties.
But what happens when the legal action targets the fund or the GPs itself?
That’s where Entity Cover steps in.
Funds and GPs can face claims that target not only individuals but also the entity itself, particularly in cases involving governance decisions, misrepresentation, or shareholder disputes. Entity Cover, also referred to as Company Liability, is what provides protection when the fund or GP, is named in a claim either instead of, or in addition to, individual insureds.
Importantly, for GPs, this does not replace Professional Indemnity (PI) coverage, it is a complementary layer of protection specific to the legal liabilities of the entity itself.
In essence, Entity Cover is about protecting your balance sheet.
Some brokers claim to offer policies where the Entity Cover has its own separate, ring-fenced limit of liability. In reality, most platform-based or facility arrangements including Fund Sentinel offer a combined limit for both D&O and Entity liability.
If a separate Entity limit is offered, it will be explicitly stated in the policy schedule. Never assume it exists unless you’ve seen it in writing.
Built for GPs, directors and fund entities across private equity, venture capital, credit, real estate and tokenised structures, Fund Sentinel combines comprehensive D&O, Entity and PI cover with reduced deductibles and simplified purchasing.
Fund Sentinel is designed specifically for investment funds and GPs operating within limited partnership structures. The policy prioritises protection for Insured Persons first, meaning directors and officers receive indemnity before the entity, unless otherwise stated.
This structure provides clarity, but it also means funds and GPs must think carefully about how much limit they purchase. If a claim is made against the entity first, defence costs and settlements may reduce the policy limit before a related or unrelated claim is brought against an individual. This risk is particularly acute in cross-jurisdictional disputes or regulatory investigations.
Entity Cover is not just a bolt-on, it’s a fundamental component of a robust risk management strategy for investment funds and GPs. In today’s high-stakes regulatory and litigation environment, protecting the entity is as vital as protecting the people who lead it.
Fund Sentinel provides clarity, customisation, and peace of mind. Want to know how your current structure compares? Let’s talk.
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