Initial Public Offering (IPO) Insurance / Prospectus Liability Insurance

Platinum Commercial and General Insurance is able to arrange, place and manage all your Initial Public Offering (IPO) insurance / Prospectus Liability insurance requirements.

Initial Public Offering (IPO) Insurance otherwise known as Prospectus Liability Insurance allows cover for companies and their directors from the risks involved with capital raising. Initial Public Offering (IPO) Insurance / Prospectus Liability Insurance may be considered by any company involved in a public offering of securities or private placements by corporate organisations.

Initial Public Offering (IPO) Insurance / Prospectus Liability Insurance is a specialised stand-alone Prospectus Liability Insurance policy for Australian companies involved in a capital raising. Typically this type of policy allows the premium to be capitalised as part of the cost of the fundraising and also allows for the ring fencing of prospectus liability exposures to avoid the depletion or exhaustion of any indemnity limits available under any separate D&O Insurance policy held by the insured. Also, some Prospectus Liability insurance Policies also provides 'entity' cover for the Company and not just the directors and officers.

The parties that may be held liable for a defective capital raising document typically include:

the company making the offer

the directors of the company

any proposed director named in the disclosure document

the underwriter

any person who has made or consented to a statement contained in the disclosure document (including a person who is knowingly involved in a contravention)

Investors who suffer a loss as a result of relying on a defective disclosure document can sue these parties to recover their loss.

These parties may then be liable for significant damages awards, the claimants’ costs and their own defence costs. Defence costs are typically very high in the case of a securities claim, particularly when such claims are made in ‘class actions’.

A defective capital raising disclosure document can also lead to regulatory proceedings by the Australian Securities and Investment Commission.

Initial Public Offering (IPO) Insurance / Prospectus Liability Insurance is a single premium transaction specific policy which covers the Insureds for Loss they are legally liable to pay by reason of a Securities Claim made against them for a defective Disclosure Document.

Benefits of (IPO) insurance / Prospectus Liability insurance

Quaranting of prospectus liability exposure avoids the depletion or exhaustion of any indemnity limits available under any applicable D&O policy held by the insured

The insurance premium may be capitalised as part of the cost of the fundraising

Entity cover means the policy provides cover to the Company and not just the directors and officers

Advance payment of defence costs

Non imputation for the protection of innocent Insured Persons

A 6 year policy period is available to cover the long tail exposure - No Insured versus Insured exclusion

Worldwide coverage including coverage for American Depository Receipts if required - Experienced local claims handling.