Professional indemnity insurance for fund administrators in Cyprus in 2025.
December 17, 2023
Ian Westwood
December 17, 2023
Ian Westwood
Even if you’re an experienced fund administrator, mistakes can happen. Regardless of your experience level, there is always the possibility of an error and omission.
Professional indemnity insurance for fund administrators can protect companies from any liability incurred if you allegedly provided poor advice, services, or designs to a client.
After 2017 the number of fund administrators in Cyprus skyrocketed. Requests for comprehensive professional indemnity insurance have also increased significantly.
In this guide to professional indemnity insurance for fund administrators in Cyprus, we will examine all there is to know.
Table of contents
You may be wondering if you need professional liability insurance.
It’s essential coverage for business owners, including fund administrators, who provide services to customers or clients.
You should consider getting professional liability insurance coverage if you:
Professional indemnity insurance for fund administrators will become obligatory in Cyprus in 2023.
Professional indemnity insurance (or liability insurance) helps cover you and your company against professional mistakes involving your clients or customers.
This insurance type, also known as errors and omissions (E&O), will protect you if you are sued for professional errors resulting in damage or financial losses when you undertake the following tasks:
Professional indemnity insurance for fund administrators covers claims of:
Your client could sue your business even if you didn’t make a mistake.
Without professional indemnity insurance coverage, you’ll have to pay expensive legal defense costs out of pocket.
While professional liability insurance covers various claims, it doesn’t cover every circumstance.
It generally won’t protect your business from the following kinds of claims:
Property damage or bodily injury
Professional liability doesn’t cover these kinds of claims. You need a general liability insurance policy to cover property damage and bodily injury claims.
Work-related illnesses or injuries
In addition, you need a workers’ compensation policy to protect your employees from illness or injuries that leave them unable to work and the associated costs.
Data breaches
Professional liability typically doesn’t cover data breach claims. You need data breach insurance (or cyber liability insurance) to safeguard your business from losing your client’s personally identifiable information (PII).
Also, claims related to the following risks are excluded:
Most insurance providers design professional liability policies on a claims-made basis with a retroactive date and may include an extended reporting period.
The retroactive date guarantees you will be covered for incidents that occur on or after a specified date.
The extended reporting period grants an extension to cover claims after your policy expires.
This extension is usually within a 30 to 60-day period, but you can extend this for longer than a year at an additional cost.
You will only be covered for claims during the length of your policy and within the extended reporting period.
The claim must be from the covered list of errors or omissions stated in your policy that occurred after your policy’s retroactive date.
You may be covered for the following:
Some professional indemnity policies can be part of an occurrence policy.
Occurrence policies cover you and your business from losses during your policy period, even if the claim is filed after your policy’s expiry date.
The Cyprus Securities and Exchange Commission, or CySEC, issued a Consultation Paper in June 2021 to present the proposed Law on Investment Fund Administrators.
After the Consultation Paper’s conclusion, the final proposed law was presented to the House of Parliament for approval.
As per the law’s requirements, fund administrators (and others) will need to have the following:
Professional Indemnity Insurance
Capital of:
€50,000 for offering only fund administration services, or
€125,000, if authorized to offer bank account opening, cash management, and fund administration services.
Conditions of professional indemnity insurance for fund administrators
Professional indemnity insurance needs to meet the following conditions:
While some insurance risks are straightforward to cover (such as home or auto insurance), specialized insurance like professional indemnity for fund administrators is less so.
Like with any insurance, it’s best to promptly begin the insurance application and apply for quotes to receive a competitive price.
The Law on Investment Fund Administrators will make the Cyprus Alternative Investment Funds (AIFs) more attractive.
The cost of professional indemnity insurance is unique to your business.
General factors that affect the cost of fund administrator's professional indemnity insurance include the following:
When you would like to acquire a professional indemnity insurance quote, you will need to provide specific business documents, such as:
Financial statements of your company will not be required except if you also require Directors and Officers coverage.
You can work with one of our insurance specialists to obtain the right indemnity insurance coverage for your business.
Regardless of your business’s experience level, errors and omissions can occur anytime.
Professional indemnity insurance can protect companies and self-employed individuals from liability for alleged bad advice, services, or designs.
We offer professional indemnity insurance with coverage for the following:
Additional provisions
The usual exclusions of our contracts relate to any losses in connection with any claims related to the following:
Who can be insured?
Pitsas Insurances has 35 years of experience and can help to provide the best solution for your professional indemnity insurance needs.
If you would like to receive a hassle-free quote, see here.
What is the difference between general liability and professional liability insurance?
General and professional liability insurance are both essential for business owners, but they provide different types of coverage.
General liability insurance covers bodily injury or property damage claims. In contrast, professional liability insurance covers errors and omission claims.
Who needs professional liability insurance?
If you or your business offers professional advice or services to clients and customers, it is advisable to carry professional liability insurance.
As well as fund administrators, the following businesses can benefit from this type of coverage:
Professional liability insurance is required in some places of work. For example, it may be required for certain healthcare practitioners or businesses.
What is the purpose of professional liability insurance?
Most business owners and self-employed people aim for excellence, but humans make mistakes. A mistake that financially harms your client can lead to legal action.
Professional liability insurance protects you when you face lawsuits for mistakes you or your company has made.