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There are good reasons to consider Public Offering of Securities insurance from AIG

Public Offering of Securities Insurance (POSI) covers claims arising from public offerings. The policy can cover equity or debt issues, both initial and secondary.

Deep exposures

By raising capital from the public, a company is creating new relationships and exposing itself to potential liabilities which are closely scrutinized by regulators. Investors may claim the full value of their loss if the information in a prospectus is proven wrong, possibly years later. A Public Offering of Securities Insurance has limits tailored to the specific transaction and for the duration of the exposures in the relevant jurisdiction.  

Rules and regulations

Companies that want to offer their securities to the public, or trade their securities on a regulated market like the stock exchange, have to issue a prospectus. There are detailed rules about what has to be in a prospectus, what may or may not be left out and processes to follow in the case that anything material changes once issued or in the case an error is discovered.  

Who can be made liable?

A prospectus must explicitly confirm that the parties responsible for it have taken reasonable care to make sure the information is true. Such parties may face civil and criminal liability if the prospectus is inaccurate, incomplete or misleading, particularly if they cannot prove that proper care was taken preparing it. In the case of false representation, imprisonment is a possibility in some jurisdictions.

AIG’s protection

AIG’s Public Offering of Securities Insurance offers protection against some of the risks of ‘going public’, for every party involved in the transaction and for the length of time those exposures can last. With a top tier global network, AIG has worldwide capabilities and can underwrite from any country where we are licensed to operate.  

AIG’s Public Offering of Securities Insurance could be of benefit to companies of any size who are thinking of, or are in the process of, listing on a stock market.

Public Offering of Securities Insurance covers, for example:

  • Liabilities relating to a prospectus/listing particulars
  • Liabilities arising from statements or information provided in connection with the public offering, including statements made in any road shows
  • Advancement of defence costs
  • Non-rescindable policy unless there has been any fraudulent misrepresentation or fraudulent non-disclosure by any insured
  • Automatic cover for follow-on public offerings made and raising an amount of up to 25% of the value of the initial offering

This material is for the purposes of information only. Full coverage details will be available in the policy documentation.


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