Guide to D&O Insurance for IPO and Direct Listing Companies, 2024 Edition

Guide to D&O Insurance for IPO and Direct Listing Companies, 2024 Edition

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If you're gearing up for your company's IPO, it's time to think about placing your public company D&O insurance program. Get our insight to help you navigate the complexities of launching your program and aligning it with your IPO process.

Companies that have been waiting to do their IPO until conditions improve are gearing up. In fact, EY predicts the global IPO market will turn around in 2024 due to some improvements in key macroeconomic factors and anticipates a slight uptick in IPO activity this year.

Gearing up for an IPO is an exciting time, and it comes with a lot of tasks. One of these tasks that comes with some complexity is launching your public company D&O insurance program at precisely the right time with the right amount of coverage.

The good news for IPO companies is that the prices for D&O insurance have dramatically decreased in the past couple of years, a welcomed change from the nose-bleed pricing of 2021. This trend should continue into 2024.

If your company is a year to 18 months away from its IPO, now is the time to think about how and when you will launch your public company D&O insurance program. Woodruff Sawyer’s Guide to D&O Insurance for IPOs and Direct Listings, 2024 Edition can help.

In the Guide, you’ll find expert insights on the D&O insurance placement process with key timelines that align with the IPO process. Access your copy instantly below or read on for highlights from the Guide.

The Timeline for D&O Insurance and Your IPO

A public company D&O insurance program must be ready to bind before your first trade on a national exchange.

You’ll want to have plenty of time to move through the various stages of vetting a broker and then being engaged in the preparation and implementation of the insurance program.

The graphic below illustrates how the D&O insurance process aligns with key milestones on the road to IPO.

Graphic showing the D&O Insurance Process: Prepare, Launch, Broker, Implement, Support

At the time of the IPO’s organizational meeting, the D&O insurance broker would ideally already be planning the program strategy.

Then, around 60 days out from the IPO, you should head into the launch phase of the insurance program. This is usually about the time most private companies are presenting to bankers.

In the launch phase, your D&O insurance specialist broker—generalists need not apply—will help you determine what is an appropriate limit of insurance to purchase and then negotiate with the insurance markets to bring you an optimal D&O insurance program.

Remember too: In most cases, board members of IPO companies are very interested in D&O insurance since they understand that IPOs are an inflection point for D&O risk. You’ll likely want to have your D&O broker present to your company’s board.

About 45 days ahead of the IPO when the company is filing its updated registration statement with the Securities and Exchange Commission, the D&O insurance broker should be well in the throes of negotiating coverage, pricing, and warranty statements.

Finally, 15 days out or so from the IPO (before the roadshow), the broker should have the D&O insurance program ready to go before the first trade on a public exchange. This way, the only step remaining for you is to tell your broker the IPO share price and provide an order to bind the insurance program.

Get Your Copy of the Guide for More

Download Woodruff Sawyer’s Guide to D&O Insurance for IPOs and Direct Listings, 2024 Edition and get expert guidance on the process of placing a public company D&O insurance program before an IPO.




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