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Safeguard Your Leadership Team and Assets with Our Comprehensive SPAC D&O Liability Insurance

What is SPAC?

Navigating Risk with Assurance

An acronym for Special Purpose Acquisition Company, SPAC is an alternative to traditional IPOs and allows private firms to raise capital via an IPO with the goal of acquiring an existing, privately held business at a later time. This approach aims to reduce costs associated with going public and provides private companies with quicker access to public markets. De-SPAC transactions—which involve merging with a privately held business—carry various risks such as securities litigation, insolvency, and derivative/regulatory actions.

Governance Excellence, Risks Mitigated.

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What is “run-off” insurance coverage?

Run-off insurance can either be added to an existing policy or procured as a separate policy from a third-party insurer, typically for a duration not exceeding six years. Should an event transpire either before or after a merger or acquisition, any claim directed at a former director or officer is encompassed by this insurance, as long as the claim arises within the run-off timeframe. In the context of an M&A transaction, this insurance's cost is factored in. If the animosity in the transaction surpasses a certain level, the cost of the policy is borne directly by the directors, officers, or the target company itself.

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Why is this insurance necessary?

Navigating the intricacies of director and officer liabilities can be daunting and intricate

01.

Indemnification or defense cost advancement issues can spark legal concerns, with companies often not allowed to indemnify local directors/officers in many countries and an acquittal required before they can provide indemnification or defense payments.

02.

A D&O policy targeting local tax collection can help avoid hassles associated with improperly filed taxes; when insurers cannot collect additional taxes levied on companies with insurance in another country, the company itself must file these—typically resulting in audits/penalties when filing is insufficient (or fails).

03.

In the absence of coverage, directors or officers must personally respond to an investigation or litigation and thus disrupt operations.

04.

Unique local policies facilitate compliance with jurisdiction-specific regulations, ensuring organizations can effectively navigate the diverse legal landscapes they operate in.

Mitigating Liabilities, Safeguarding Integrity

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