Why LPs ask about insurance
An allocator is trusting the manager with capital, and insurance is one of the few third party signals about how well operations are run. Insurers underwrite the controls before they quote, so a bound policy implies that someone independent has examined them. Questionnaires from institutional investors increasingly include a section on coverage, and many ask for certificates or a summary schedule.
The coverages most often requested
The specific list varies by investor, but the same handful of policies appears again and again.
- Custody or crime coverage for theft or loss of the digital assets.
- Directors and officers liability for claims against fund leadership.
- Fiduciary or investment manager professional liability for claims about the fund's management.
- Cyber liability for breaches affecting investor and counterparty data.
- Technology errors and omissions where the manager operates its own platform.
Presenting the program clearly
A one page summary is usually enough to start. List each policy, the insurer, the limit, the retention, the policy period and a plain statement of what it is intended to cover. Add a sentence that links the custody coverage to your actual storage setup. Investors respond well to specifics, and vague references to being fully insured tend to raise more questions than they answer.
Keep certificates current and be ready to provide them at renewal, as allocators often check dates.
Timing coverage around fundraising
Insurance is easier to place before a diligence deadline than during one. If you are preparing a raise, an audit or an investor review, start the process several weeks in advance so that underwriting, any endorsements and the final documents are in hand. Many applicants can bind within about a week once information is complete, but complex custody structures can take longer.
Last updated October 22, 2026. Written by the Alton Risk placement team.