A coverage question familiar to brokers placing venture capital risks – who protects a fund representative when something goes wrong at a portfolio company board level – is the central commercial issue in a new insurance product launched in Australia by Berkshire Hathaway Specialty Insurance (BHSI).
BHSI has introduced its Professional First Venture Capital Liability Insurance Policy to the Australian market, aimed at VC fund managers and their associated entities. The policy combines professional indemnity, directors and officers (D&O) liability, crime coverage, and outside director protection under a single form.
When a VC fund places a representative on the board of a portfolio company, that individual carries director liability in two directions: under the portfolio company’s own D&O policy, and potentially under the fund’s management liability cover. Whether those policies respond consistently – or leave the individual exposed – depends entirely on how each is written.
For a VC or private equity (PE) fund operating across the Asia-Pacific region, liability exposure does not sit in one place. It spreads across the fund itself, the manager entity, and every portfolio company on the books, according to Continuum, an Asia-Pacific insurance advisory firm.
BHSI’s policy addresses this directly with outside director cover for insured persons serving as representatives on the boards of portfolio companies, extending protection to general partner (GP) representatives in that role rather than leaving it contingent on the portfolio company’s own policy responding.
The relevance of that feature has sharpened in Australia. A 2026 review of Australian Securities and Investments Commission (ASIC) proceedings and court actions by King & Wood Mallesons found that 2025 cases highlighted the regulator’s continued focus on continuous disclosure and the readiness of courts to hold directors personally accountable where their conduct exposes a company to regulatory breach.
Law firm Piper Alderman has noted that where an economic incentive exists for a litigation funder to back a claim, directors may face proceedings regardless of whether the regulator considered director-level enforcement appropriate – a dynamic that applies directly to VC fund representatives sitting on portfolio company boards.
US-based insurance brokerage Woodruff Sawyer, in its October 2025 general partnership liability market guide, identified outside director liability (ODL) claims and government investigations as top concerns for VC and PE firms, with coverage coordination described as critical to managing those exposures.
The policy includes lifetime run-off cover for retired directors and officers – a feature that reflects a structural reality of venture capital investment.
In Australia, a director can be sued years after leaving a role for decisions made during their tenure. Australian D&O policies are typically claims-made and notified, meaning retroactive dates and run-off periods carry as much weight as the headline limit. In VC, where investments can take a decade or more to realise, standard run-off periods often do not cover the full exposure horizon of a retired partner.
The policy also covers the cost of correcting accidental errors in a fund’s net asset value (NAV) calculation. NAV errors – even unintentional ones – can trigger LP disputes or regulatory scrutiny. This feature is most relevant to managers running multiple vehicles simultaneously.
Other inclusions are: professional indemnity for services performed by VC firms, reinstatement of Side A coverage, comprehensive crime coverage, automatic cover for new funds, mitigation cover, and optional entity investigations cover.
Andrew Boosey, manager of financial institutions, executive and professional lines at BHSI Australia, said the product responds to where the domestic market currently sits. “Australia’s venture capital sector continues to mature, and the risks facing fund managers are evolving along with it. We are pleased to bring this innovative solution to Australia to support VC managers as they navigate an increasingly complex risk landscape,” Boosey said.
The launch comes as the Australian VC market continues to expand. Funding into Australian start-ups reached $2.9 billion in 2025, with 2026 on track to land at $3.9 billion based on data through the first half of the year, according to Dealroom.
The Early Stage Venture Capital Limited Partnerships (ESVCLP) and Venture Capital Limited Partnerships (VCLP) programs – the government’s primary tax-advantaged structures for VC fund formation – supported 784 investments totalling approximately $2.3 billion in 2024-25, according to Money Management, citing federal budget data. The government has also announced expansions to eligible investee asset thresholds from July 1, 2027, expected to draw more fund managers into those structures.
More funds and more fund managers mean more board seats, more LP relationships, and more exposure points. For brokers active in the financial institutions space, that growth translates into a more technically demanding placement environment.
The BHSI launch is a prompt for brokers to examine existing VC fund programs against several specific questions: whether outside director cover is explicitly included in the current fund policy rather than assumed; whether run-off periods match the fund’s investment horizon; and whether crime coverage is broad enough for the fund’s operational profile.
Brokers should also examine accumulation clauses where a fund’s D&O cover and a portfolio company’s policy sit with the same insurer. Such clauses can reduce total available cover in the event of a claim affecting both – a risk that increases as fund managers take on multiple board roles across a growing portfolio.
