• Broker
• Professional and Financial Lines
• Commercial Financial Liability
• Public Offering of Securities Insurance

• Broker
  • Professional and Financial Lines
    • Professional Indemnity
    • Financial Institutions
    • Commercial Financial Liability
      • Commercial Crime
      • Directors and Officers Liability
      • Kidnap and Ransom
      • Pension Trustees Liability
      • Public Offering of Securities Insurance
    • Product Leadership
    • Quality Assurance
    • Claims
    • Lloyd's Box Attendance
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    • Contacts

Public Offering of Securities Insurance (POSI)

When a company seeks to raise capital through the offer of securities (shares or debt) to the public, or seeks an admission to trade securities, a prospectus or listing document will be issued. This document will detail financial information about the company and its future objectives and strategies.

Offering your company’s securities for sale can present many risks, and hidden potential costs, quite apart from the initial costs involved in getting the transaction through.
The publication of an offer document, and the marketing presentations during the bookbuilding stage give rise to a number of potential liabilities, and open up the company and its directors up to the risk of litigation if the securities’ performance is not in line with expectations of the investors. Legal liability exists for material mis-statements of omissions in the documents related to an offering of securities

A POSI policy could pay for the defence and settlement of such actions, were they to be brought. In a world where uncertainty in investments is endemic, and companies are frequently selling securities in order to achieve as much financial stability as possible, the protection afforded by a POSI policy could mean the difference between carrying on as a going concern if an investor or regulator were to bring an action after the sale of securities, or having serious cashflow and financial provisioning issues. 

Some features of the policy are:

• Broad form, with minimal exclusions
• Cover for the company, its directors, selling and/or controlling shareholders, and for the directors’ liabilities to underwriters/brokers in the placing agreement
• Cover for investigations costs, as well as defence costs and settlements
• Premium paid can be written down as a cost of transaction for tax purposes (United Kingdom)
• 7 year policy term

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