More US hedge fund executives and lawyers are moving towards using group personal excess liability insurance instead of individual policies.

Insurance consultants SKCG Group says group policies have grown in popularity during the past three years due to multi-million court cases.

“Demand for this insurance has soared in the past three years and is higher than at any time in the past quarter-century,” Head of Private Client Services Richard Baskind said.

“Many hedge fund managers and legal professionals feel like they have a bull’s eye on their back, and there is no ‘off-the-rack’ insurance policy that can fully protect them.

“Many of these people need more protection than the market is willing to sell them, so they are turning to group personal excess liability policies to find that extra security.”

Mr Baskind says there needs to be 10 or more individuals before a group policy can be bought, and it will provide cover of up to $US50 million ($47.6 million).

“The average amount of damages has increased dramatically during the past decade and the maximum coverage provided by traditional policies is not keeping pace so the difference can be substantial,” he said.  

According to SKCG, group plans cost 30% to 70% less than individual policies.

Mr Baskind says an individual can purchase $US25 million ($23.8 million) of cover for $US3000-$US4000 ($2860-$3814) in a group plan as opposed to $US10,000-$12,000 ($9535-$11,443) for an individual policy. 

“Another reason managers tend to favour group plans is that even those with a history of making claims on their policies can obtain coverage in a group when they may have been rejected as an individual,” he said. 

“These plans are most popular with financial services companies, law firms, medical groups and real estate firms.”