Public Offering of Securities Insurance
Charting your way through an IPO
Public Offering of Securities Insurance (POSI) covers claims arising from public offerings. The policy can cover equity or debt issues, both initial and secondary.
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.
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.
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 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:
This material is for the purposes of information only. Full coverage details will be available in the policy documentation.