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Guide to D&O Insurance for IPOs and Direct Listings, 2023 Edition

October 25, 2022

/Management Liability/D&O

After a record year of IPO activity in 2021, 2022 has been … anticlimactic. By Q3 2022, the global IPO market saw 992 IPOsa 57% decrease year-over-year, according to EY. Market uncertainties, increased volatility, and other factors are to blame.

That doesn’t mean, however, that IPO readiness has gone away. In fact, many companies are preparing now so that they are ready when the IPO window opens. Part of that preparation is making sure their public-company-ready D&O insurance program is in place at the right time.

In years past, our goal was to lock in D&O insurance pricing even if IPOs were going to be delayed because premiums were on the rise. Fast-forward to 2022 and looking into 2023, pricing for D&O insurance is decreasing.

So, if your company is thinking about going public and it’s been a while since you evaluated the D&O insurance program, it’s worthwhile to revisit it as the market has softened. Given how high prices climbed in 2021, updated pricing in 2022 will be a welcome change.

Woodruff Sawyer’s Guide to D&O Insurance for IPOs and Direct Listings, 2023 Edition can help with the process. In it, you’ll find expert guidance on how to understand, evaluate, and place your D&O insurance program ahead of an IPO.

Access your copy instantly below or read on for highlights from the Guide.

Guide to IPO and Direct Listings Cover 2023

The IPO/D&O Insurance Timeline

Private companies that are going public must have their public company D&O insurance program ready to bind before the IPO. Getting an early start is keyat least 90 days out, if not sooner. As illustrated below, there are several steps to placing the insurance that coincide with company milestones ahead of the IPO.

D&O insurance policy timeline

Starting at the time of the IPO’s organizational meeting, the D&O insurance broker should already be putting together the program strategy.

About 60 days out from the IPO, when companies are presenting to bankers, the insurance broker ideally is in the launch phase, where they are refining limits, negotiating with markets, and presenting to the company board.

The next step for the D&O insurance broker is to negotiate coverage, pricing, and warranty statements around 45 days ahead of the IPOabout the time the company files its updated registration statement with the Securities and Exchange Commission.

Finally, during the roadshow period, companies will want to have already locked down their D&O insurance program so it is ready to respond before the first trade on a public exchange takes place.

Learn More

Download Woodruff Sawyer’s Guide to D&O Insurance for IPOs and Direct Listings, 2023 Edition and get in-depth information on the topics highlighted in this article, and more.

Guide to IPO and Direct Listings Cover 2023

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All views expressed in this article are the author’s own and do not necessarily represent the position of Woodruff-Sawyer & Co.

Priya Cherian Huskins

Senior Vice President, Management Liability

Editor, Management Liability/D&O

Priya is a recognized expert and frequent speaker on D&O liability risk and its mitigation. In addition to consulting on D&O insurance, she counsels clients on corporate governance matters, including ways to reduce their exposure to shareholder lawsuits and regulatory investigations. Priya serves on the board of an S&P 500 public company and a large private company and has an impressive list of publications, speaking engagements, and awards for her influence and expertise in the industry. 

415.402.6527

LinkedIn

Priya Cherian Huskins

Senior Vice President, Management Liability

Editor, Management Liability/D&O

Priya is a recognized expert and frequent speaker on D&O liability risk and its mitigation. In addition to consulting on D&O insurance, she counsels clients on corporate governance matters, including ways to reduce their exposure to shareholder lawsuits and regulatory investigations. Priya serves on the board of an S&P 500 public company and a large private company and has an impressive list of publications, speaking engagements, and awards for her influence and expertise in the industry. 

415.402.6527

LinkedIn