Public Offering of Securities Insurance (POSI)
A POSI protects companies from financial losses and liability claims arising from errors in prospectuses, presentations, or investor communications in connection with capital market transactions subject to prospectus requirements.
Safely through the capital market
POSI – what is it?
Initial public offerings and public offerings are milestones – and at the same time high-risk situations. Even minor inaccuracies in prospectuses or presentations can result in claims for damages running into millions. POSI is a specialised financial loss liability insurance that provides targeted cover for companies, executive bodies and existing shareholders during these critical phases – as a supplement to directors' and officers' (D&O) insurance, without affecting the sum insured.
Frequently asked questions about Public Offering of Securities Insurance (POSI)
We have compiled the most frequently asked questions about POSI in our FAQ section. Our experts are also available to provide you with individual advice.
Capital market transactions involve specific liability risks that are not fully covered by traditional D&O insurance. Although D&O insurance offers protection for board members and senior executives, it is not specifically designed for the complex risks of capital market transactions. It does not usually cover claims arising from incorrect prospectuses, roadshow materials or investor communications in the context of an IPO or public offering.
POSI closes this gap. It provides comprehensive cover for companies, executive bodies and existing shareholders during sensitive transaction phases – while at the same time preserving the valuable D&O limit. This means that your existing D&O cover remains unaffected and continues to be available for day-to-day management of the company.
The insurance covers financial losses arising, for example, from incorrect prospectuses, false information in presentations or misleading investor communications. It also covers liability claims from investors or other claimants, as well as the costs of legal defence and the fulfilment of contractual indemnities towards banks and advisors.
The insurance does not cover intentional or knowingly caused breaches of duty, bodily injury and property damage, as well as contractual penalties and fines that are not insurable due to legal requirements.
Typical exclusions include claims relating to insider trading, market manipulation, fraud or other criminal acts. Also excluded are false statements made knowingly, as well as any claims that existed prior to the commencement of insurance cover.
A POSI is useful for companies planning an initial public offering, a capital increase or another public securities offering. It is particularly important for managers, executive bodies and existing shareholders with personal liability, as well as for all parties involved who bear liability risks in connection with the transaction and are involved in preparing the prospectus.
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Further insurance solutions
In addition to financial loss liability insurance, we also offer numerous other insurance solutions that may be of interest to you.
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