This type of insurance is also known as General Partners’ Liability and Limited Partnership Reimbursement coverage.
A general partner’s management and fiduciary responsibilities to a limited partnership closely parallel the director’s or officer’s to a corporation. Exposure occurs when general partners become the financial managers of a limited partnership. The directors and officers of corporate general partners share this type of exposure.
Some causes of claims are as follows:
Untrue written or oral statements made by the general partners.
Breach of fiduciary duty.
Incomplete disclosure of facts.
Omission or misleading statements in the offering memorandum.
Selling of unregistered limited partnership interests.
Conflict of interest.
Failure to devote adequate time to the partnership.
Appointment of drilling contracts without proper prior investigation as to their experience.
Failure to minimize risk factors that prove detrimental.