...a Frenkel & Co., Inc. Company

Office Package

Coverage details

Sometimes also referred to as a "BOP" or Business Owners Package, this policy is called a "Package" because it combines a Property coverage section with a Liability coverage section.

Coverage Description
"All Risk" Refers to the perils (ie.: fire, lightning) that are covered under the policy.  An "All Risk" policy, sometimes also called "Special Perils" covers all risks of physical loss except for those causes that are specifically excluded.  There is no such thing as a true "all risk" policy because every policy has at least some excluded perils
Earthquake Standard "all risk" policies exclude earthquake.   Earthquake coverage must be specifically endorsed on the policy.  If you purchase earthquake coverage make sure you also get earthquake sprinkler leakage coverage if your office has fire sprinklers
Flood Standard "all risk" policies exclude flood.   Flood coverage must be specifically endorsed on the policy.
Seepage / Back-up of sewers and drains Standard "all risk" policies exclude seepage and back-up of sewers and drains.   This coverage must be specifically endorsed on the policy.
Real Property Covers the value of the building owned or rented under a net lease as a result of a covered loss.  We recommend replacement cost coverage which will pay the full cost to repair or replace (new for old) up to the policy limit
Personal Property Covers the value of all contents and tenant improvements as a result of a covered loss.  We recommend replacement cost coverage which will pay the full cost to repair or replace (new for old) up to the policy limit
Business Income Covers loss of profit and expenses that necessarily continue in the event of a loss as a result of a covered loss to the insured location.  Most hedge funds do not have a business income exposure because they can relocate to temporary premises and resume operations without sustaining an interruption in business.  The cost of relocating to temporary premises can be substantial - that's why extra expense coverage is so important for a hedge fund.

There is also some question as to whether a hedge fund can prove a business income loss.  The insurance company may argue that trades that could have been made during a period of interruption may have gone against the fund and resulted in losses.
Extra Expense Covers extra expenses over and above normal operating expenses as a result of a covered loss to the insured location.  These expenses may include costs for temporary space, installing equipment at temporary premises, and necessary overtime costs.
Leasehold Interest Covers the value of a below-market lease in the event of lease cancellation due to a covered loss to the insured location.
EDP Equipment, Data & Media Covers all electronic equipment, the value of discs and tapes, and the cost to re-create data that is lost due to a covered loss to the insured location.  Also eliminates the standard policy exclusions for mechanical breakdown and damage due to power surges caused by artificial currents (as opposed to damage caused by lightning),
Rent Covers rent expense in the event your lease says rent does not abate in the event of a fire or other casualty
Accounts Receivable Generally not an exposure for hedge funds, but covers the amount of accounts receivable you cannot collect because your receivable records have been damaged due to a covered loss
Valuable Papers & Records Covers the cost to re-create or restore records that have been stolen or damaged due to a covered loss
Fine Arts Covers paintings, prints, sculpture, antiques, and other fine art stolen or  damaged due to a covered loss
Property off premises / in transit Covers personal property while outside your office or in transit, such as laptop computers
Personal Effects of Employees Covers personal property of employees while located in your office
Newly acquired property Automatically covers newly acquired property for a period of time until you have a chance to report it to the insurance company
Arson & Theft Reward Pays for a reward offered to individuals who provide information following an arson or theft loss
Civil Authority Provides coverage if access to your premises is blocked by the authorities due to a covered loss
Ordinance or Law Covers the value of the undamaged portion of a building that must be demolished to comply with building codes - and the cost of the demolition
Covers the increased cost of construction to comply with the latest building codes
Service Interruption Covers loss due to interruption of utility service (electric, water, steam, gas, or telecommunications) due to a covered loss to the utility

Commercial General Liability
Coverage Description
Commercial General Liability Also referred to as a "CGL" policy, covers defense costs and any judgments or settlements arising out of an occurrence resulting in bodily injury, property damage, or personal and advertising injury for which you are legally liable to a third party. The policy has a number of components and extensions explained below:
Defense Costs The insurer has a very broad duty to defend claims brought under the policy.  Defense costs  are outside (in addition to) the limits of liability
Premises and Operations Liability The CGL policy provides coverage for bodily injury and property damage sustained by others at your office or away from office within the U.S. and Canada as a result of your funds' operations. This part of the policy covers typical "slip and fall" claims
Medical Expenses Pays up to the applicable medical expense limit the  medical bills if someone is injured and needs medical treatment due to an accident on your premises.  This coverage is provided without regard to fault.
Personal and Advertising Injury Covers you for certain offenses you or your employees commit in the course of your business, such as libel, slander, disparagement, or copyright infringement in your advertisements
Fire Legal Liability Covers damage to that portion of a building you lease caused by a fire for which you are responsible
Employee Benefits Liability Covers claims made by employees for errors (non-ERISA claims) you make in administration of your benefits program
Hired & Non-Owned Auto Liability Covers claims arising out of the use of a hired (rental) vehicle or a non-owned vehicle (such as an employee's car) in your business
Additional Insured Provides coverage under your policy for another party, such as your landlord, as required under a contract or agreement
Limits The standard limits for a CGL policy are $1,000,000 each occurrence and $2,000,000 general aggregate

Information needed to quote
  • Company background and ownership history
  • Description of all operations-brochures/website if available
  • Federal Employer ID Number (FEIN)
  • Copies of all current insurance policies
  • Insurance carrier loss data (“Loss Runs”, which are computer printouts from your current/prior insurance carriers showing your claims history) for all lines of insurance (Three years minimum/Five years if available)- with a description of any loss in excess of $25,000
  • For each location:
  • Address
  • Age of building / Total number of stories in building
  • Square foot area of premises owned or leased
  • Construction/ Walls, Roof
  • Protection (Sprinklers, Fire/Smoke Alarm, Burglar Alarm, Extinguishers)
  • Property Values to be Insured:
  • Building (if applicable)
  • Contents (Furniture, Tenant Improvements, Computer, Office and Telecommunications Equipment – all at cost to replace)
  • Business Income / Extra Expense
  • Valuable Papers & Records / Data (Cost to re-create if damaged)
  • Fine Art (Provide list of items with values)

Hedge Fund Insurance, a division of Frenkel & Co., Inc., has access to every major market in the U.S., London, and Bermuda. As brokers, we represent the policyholder and not the insurance company. Among the largest brokers in the country as ranked by Business Insurance magazine, we have the market clout necessary to get you the best possible price. Some of the markets we place Office Package Policies with include:

  • Chubb
  • CNA
  • Fireman's Fund
  • Hanover
  • Hartford
  • Tower
  • Travelers
  • Zurich

The Property and Commercial General Liability sections of an Office Package Policy are rated separately. The total premium depends upon many factors including the property limits purchased, location, physical protection such as sprinkler systems and alarms, and square foot area of the space. A very rough ballpark property premium would be $2,500 for every $1,000,000 of property values. A ballpark liability premium would be $400 for every 1,000 square feet of space. Of course, Hedge Fund Insurance will provide you with a complete proposal, including the exact annual premium, once we better understand your risk and have had a chance to present your account to underwriters.

Claim Examples
Hedge Funds typically have a very low freqency of Property and General Liability claims. The most common types of Property claims are:
  • Fire
  • Water damage from broken pipes
  • Theft of laptops and other property
  • Property damage from major storms such as hurricanes or tornados
The most common Liability claims are:
  • Injury to business invitee due to slip and fall
  • Auto accident involving rental car (covered under Hired & Non-Owned Auto Liability coverage)
  • Fire or water causes damage to property of other building tenants
  • Employee causes accidental injury to third party while attending a conference

Sell Sheets

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Copyright © 2009 Frenkel & Co., Inc.

Hedge Fund Insurance
a division of Frenkel & Co., Inc.
350 Hudson Street, 4th Floor, New York, NY 10014
Phone: 212-488-0270  Fax: 212-488-0432