1. This Article shall apply to AIFMs that choose to cover professional liability risks through professional indemnity insurance.

2. The AIFM shall take out and maintain at all times professional indemnity insurance that:

(a) shall have an initial term of no less than one year;

(b) shall have a notice period for cancellation of at least 90 days;

(c) shall cover professional liability risks as defined in Article 12(1) and (2);

(d) is taken out from a UK or non-UK undertaking authorised to provide professional indemnity insurance, in accordance with the law of the United Kingdom or of any part of the United Kingdom or the law of a third country;

(e) is provided by a third party entity.

Any agreed defined excess shall be fully covered by own funds which are in addition to the own funds to be provided in accordance with rules 11.3.1(2) and 11.3.2 of the Interim Prudential sourcebook for Investment Businesses.

3. The coverage of the insurance for an individual claim shall be equal to at least 0,7 % of the value of the portfolios of AIFs managed by the AIFM calculated as set out in the second subparagraph of Article 14(2).