As you may know, directors and officers (D&O) of organizations can be pursued personally for actions taken by their companies. These risks become substantially greater when a company decides to go public with an initial public offering (IPO). Therefore, if you’re a director or officer currently on the board of a company that is considering going public, there are a few steps you should take to protect yourself. One of the best ways to ensure a smooth transition from private to public, not just for the company but for each officer personally, is to get “IPO insurance”. While the financial benefits of an IPO may outweigh the potential liabilities, it is still important to be prepared for the worst-case scenario, especially since the IPO process often results in the exposure of personal assets held by the board of directors. In turn, this leads to increased scrutiny from regulators, plaintiffs’ attorneys, and of course the public. Do yourself a favour and reduce your risk before and after the IPO by purchasing D&O insurance which can cover the pre IPO disclosure/roadshows, the IPO and post IPO decisions/acts/actions.
ALIGNED is proud to offer comprehensive IPO D&O insurance that covers a wide range of liability risks, as well as defence costs should they be necessary. Below are some of the benefits of an IPO D&O insurance policy with ALIGNED.
Protect Your D&O from These Liabilities with IPO Insurance
The process of taking a company public, while exciting, is often fraught with new risks and exposures. From the moment you begin to act on this decision, such as by making legal, tax, or operational decisions leading up to it, your business can be held liable. That is why it’s best to have insurance in place before making an offering. In fact, IPO D&O insurance is extremely useful through all stages of an IPO: before a company goes public, during the process, and after the fact. The risks are often the greatest in the first year, which is why having a comprehensive insurance policy is so important. In addition, you’ll want to find a policy that covers all parties at risk within the company, such as the issuing corporation, the directors and officers, and the policy-making officers. ALIGNED offers protection against the following exposures or events:
- Failed IPO
- Accounting restatements
- Stock under performance
- Investigations by provincial or federal securities regulators and other enforcement agencies
- Earnings failing to meet projections
- Products or services failing to perform as expected
- The launch of products or services being delayed
- Internal investigations based on whistleblower complaints
- Inadequate disclosure regarding mergers, acquisitions, and divestitures
- Allegations of misrepresentation
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It Only Makes Sense to ALIGN Yourself With IPO D&O Insurance Specialists
Commercial insurance is our specialty. Our highly skilled team of commercial insurance brokers will be with you every step of the way. With ALIGNED, you will save time, money, and the stress of shopping around for an IPO D&O insurance policy that fits your budget and provides comprehensive coverage. Our customized insurance solutions coupled with our affordable prices have made us the go-to insurance brokerage for all companies going public in Canada.