Public Offering Security Insurance (POSI)

This insurance offers coverage for companies, directors, and officers against liability claims arising from public securities offerings. It safeguards businesses from financial losses resulting from lawsuits, including misrepresentation claims, misleading statements, and losses incurred by investors due to the offering.

Coverage

POSI typically covers a wide range of securities offerings, including:


  • Initial public offerings (IPOs)
  • Secondary offerings
  • Debt offerings
  • Rights offerings

Costing

  • The insurance cost depends on business size, type, coverage level, and risk profile
  • Despite variations, this insurance is relatively affordable

Key terms

  • Public offering: The sale of securities to the public
  • Securities: Financial instruments, such as stocks, bonds, and mutual funds
  • Liability claim: A legal action that is brought against a company or individual for damages
  • Indemnity: The act of compensating someone for a loss or damage
  • Policy: The document that outlines the terms of an insurance policy

Points to consider

  • Engage an experienced broker with expertise before making a purchase
  • Carefully review policy terms to ensure understanding of included coverages and exclusions

Claim Process

1

Notification

2

Assignment of claim handler

3

Investigation

4

Coverage determination

5

Claim settlement/negotiation

6

Claim resolution

7

Thank You

Note: The claims process can vary depending on the specific circumstances and the policies.

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