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Guide to D&O Insurance for IPOs and Direct Listings, 2022 Edition

November 17, 2021

/Management Liability/D&O

Going from a private to public company is a big undertaking for directors and officers. One task that is not always at the top of the to-do list is making sure that there is a well-brokered directors and officers liability insurance program in place at precisely the right time.

Public company D&O insurance is more complex and more expensive than its private company counterpart, reflecting the very real increase in potential personal liability exposure directors and officers of new public companies will face when it comes to common litigation scenarios. These scenarios include things like securities class actions and derivative suits not to mention enforcement actions by the Securities and Exchange Commission and other regulators.

Woodruff Sawyer’s Guide to D&O Insurance for IPOs and Direct Listings, 2022 Edition, will walk you through the steps needed to coordinate D&O risk management with your IPO or direct listing process.

Guide to D&O Insurance for IPOs and Direct Listings 2022 Cover

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The Timing

Timing matters when coordinating the placement of a D&O insurance program with the IPO or direct listing.

Getting an early start on the process is key. Ideally, you will start the process at least a year before you plan to go public by making strategic moves with your private company D&O insurance renewal.

However, even if you start later than this, there is still time to put an appropriate and responsive program in place. Ideally, you will start working on your public company D&O insurance strategy with your broker around the time of the big organizational meeting of your IPO or direct listing.

IPO Milestones Timeline

The Process

Placing a public company D&O insurance program has many strategic phases.

DO Insurance Process

The five key phases of placing D&O insurance for IPOs and direct listings are as follows:

  1. Prepare: This is when you and your broker create the strategy, evaluate the potential D&O program options, review certain corporate governance practices, and more.
  2. Launch: In this phase, you and the broker refine insurance limits, brief your board on the important issues, and explore employee training (private to public conduct) to further mitigate risk.
  3. Broker: This phase is all about negotiation—negotiating coverage and pricing, higher limits warranties, etc.—to tighten up the details of your program.
  4. Implement: This is when you and the broker will finish off a series of housekeeping items to seal the deal.
  5. Support: No D&O insurance program is complete without ongoing support. You’ll want to access to your expert broker for advice, training, and education as well as claims advocacy for the long haul.

The Experience

Experience matters when it comes to IPOs, direct listings, and D&O insurance. You want a specialist on your insurance brokerage team to work through all the D&O insurance issues that will arise before, during, and after the process of going public, as well as during your life as a public company.

IPO and direct listing companies come to Woodruff Sawyer because of our extensive experience, industry knowledge, and the ongoing support we are able to offer on topics ranging from insurance and claims to corporate governance as it impacts D&O risk.

As a result, we are the clear leader when it comes to placing D&O insurance for companies going public. No one brokers more D&O insurance for these types of transactions than Woodruff Sawyer.

Download the Guide Now

Download Woodruff Sawyer’s Guide to D&O Insurance for IPOs and Direct Listings, 2022 Edition and get in-depth information on the topics highlighted in this article, and more.

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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