Travelers is joining the ranks of those offering Side A coverage to mutual fund directors. Richard Pemberton, product manager, said there is demand for the insurance now as a result of the Securities and Exchange Commission's increased focus on fund boards following the mutual fund scandal. "The general trend in the market is that independent directors of companies or funds really want their own dedicated coverage," he said.

Travelers already offers insurance to investment advisers and mutual funds. The new insurance, called Travelers SelectOne(SM) Broad Form for Mutual Fund Directors, will cover a broader scope than what is typically in a fund's insurance policy. Side A coverage covers the directors for loss when indemnification from the fund is not available. It will sit on top of the fund's policy but will also drop down and become a primary policy in the event that the mutual fund is financially distressed, Pemberton explained. The premiums vary by risk, a Travelers spokeswoman said.

Still, there is competition in the field with others such as ICI Mutual and AIG's National Union Fire Insurance Co. offering additional coverage solely for independent directors. When asked what differentiates their coverage from the other providers, Pemberton responded "we've got the experience and the track record with investment advisers and funds. I think we're going to do well with it." Initially, Travelers plans to go out to directors at the funds it already insures. "That will be a primary focus for getting clients. It's a possibility that we might offer it to funds we don't have another insurance relationship with," Pemberton said.