When a company issues a prospectus to raise funds via a Public Offering of Securities various parties are exposed to potential liabilities for alleged inaccuracy of statements and information provided in the prospectus.
Compensation claims can be significant, particularly where larger amounts of funds are being raised.
Actions can be derived from various parties including, but certainly not limited to: -
Shareholders
Directors
Former Directors
Regulatory bodies
Should Directors of the company be pursued personally, very often they may find that their Directors’ and Officers’ Liability Insurance excludes cover in respect of liability arising from Public Offerings, and of course a Directors’ and Officers’ Liability insurance does not protect the company entity.
Liability arising from such means of raising funds can be specifically insured under a Public Offering of Securities Insurance.
There are many advantages and benefits to arranging cover in this manner: -
The policy can be arranged to protect the company entity, it’s Directors, staff, selling &/or controlling shareholders and investment advisors.
The policy can be arranged for a fixed term at a single premium. The term should match the applicable period of Statute of Limitations (6 years in the UK). These effectively ‘ring-fences’ any liability arising from the offering.
Arranging a Public Offering of Securities Insurance ensures that the aggregated Limit of Indemnity provided under a Directors’ and Officers’ Liability insurance is not eroded.
Towergate ghbc are experienced in this specialist class of insurance and will be pleased to provide further information and assistance upon request.
Towergate ghbc is a trading name of Towergate Underwriting Group Limited and is authorised and regulated by the Financial Services Authority.
You can check our details on the FSA register (www.fsa.gov.uk/register) under Firm Reference Number 313250
