The new coverage aims to address a longstanding gap in D&O insurance, which typically protects corporate executives and board members but not the investment banks that help underwrite public offerings. IPO companies commonly agree to indemnify these banks against certain legal claims, leaving issuers potentially liable for millions in costs if litigation arises.
Marsh cited internal data showing that investment banks are named as co-defendants in about 20% of IPO-related shareholder class actions annually, particularly in suits involving alleged material misstatements or omissions in registration statements.
“The journey from private to public company is fraught with significant exposure, including the potential financial exposure from indemnification obligations to investment banks,” said Andy Matthews, a vice president in Marsh’s FINPRO Practice. “With this new coverage enhancement, Marsh is able to provide clients pursuing IPOs with a best-in-class D&O insurance placement that reduces operational costs and better safeguards their balance sheet during critical growth stages.”
The announcement follows a period of softening conditions in the US public company D&O market. Marsh previously reported that D&O premiums for US-listed firms declined by around 5% in the first quarter of 2025, continuing a trend of more competitive pricing that began in 2022.
At that time, the firm observed insurers returning to the market with more flexibility on pricing and limits after several years of hard market conditions. However, underwriters continue to monitor emerging litigation risks tied to ESG, regulatory scrutiny and shareholder activism.
The latest enhancement reflects increasing demand from clients for more comprehensive risk transfer solutions during IPOs. Marsh developed the product in collaboration within D&O insurers and has positioned it as an add-on to traditional D&O programs.
The offering is intended to reduce balance sheet exposure while complementing Marsh’s broader advisory support for companies transitioning into the public market.
