Reasons to consider Public Offering of Securities insurance from AIG
Deep exposures
By raising capital from the public, a company is creating new relationships, and opening up potential liabilities which are closely scrutinised by regulators. Investors may claim the full value of their loss if the information in the prospectus is proved to be wrong, possibly years later. A POSI policy has limits tailored to the specific transaction, and for the duration of the exposures in the relevant jurisdiction.
Rules and regulations
Companies that want to offer their securities to the public, or trade their securities on a regulated market like the stock exchange, have to issue a prospectus. There are detailed rules about what has to be in a prospectus, what may or may not be left out and processes to follow in the case that anything material changes once issued or in the case an error is discovered.
Who can be liable?
A prospectus must explicitly confirm that the people responsible for it have taken reasonable care to make sure the information is true. So they, as well as the company and its directors, may face civil and criminal liabilities if the prospectus is inaccurate, incomplete or misleading particularly if they can’t prove that proper care was taken preparing it. In the case of false representation, imprisonment is a possibility in some jurisdictions.
AIG’s protection
An AIG POSI policy offers protection against some of the risks of ‘going public’, for every party involved in the transaction and for the length of time those exposures can last. AIG also has worldwide capabilities and can underwrite from any country where we are licensed to operate (and we have the largest owned global network of any insurance company).