The Chubb Group of Insurance Cos. is offering banks protection against liabilities that may arise from their involvement with proprietary mutual funds.

The Warren, N.J., company features the coverage in its new investment company asset protection program.

The program includes liability coverage for fund directors and officers, and errors and omissions coverage for the fund itself and its service providers, like banks.

Combination Coverage

"Adapting to the complex nature of investment companies, these coverages can protect any combination" of the affiliated individuals and entities, said Evan Rosenberg, investment company product manager in Chubb's department of financial institutions.

Often, outside distributers of bank funds arrange for this coverage, Mr. Rosenberg said. But more banks are taking it on themselves as a way of ensuring they are covered, he said.

Chubb will write the coverage for funds, unit investment trusts, and offshore funds.

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