De-SPAC D&O Liability Insurance

What Is De-SPAC D&O Liability Insurance? Who is it for? Why do you need it? Why get it with First Cover? Still in doubt?

What Is
De-SPAC D&O Liability Insurance

De-SPAC D&O liability insurance protects target companies while merging with SPACs, as opposed to SPAC D&O liability which protects the SPAC itself. Any parties can be held liable, including the acquiring company, the target company, the SPAC entity and its sponsors, and even the accountants and bankers.

If the newly public company properly protects these individuals with a D&O policy for the new entity, they can be held personally liable if the company underperforms. Shareholders can also object to the merger, securities litigation can be started, and the risk of insolvency can arise, as can derivative and regulatory actions.

Who is it for

1. The pre-closing directors and officers of the private target company that will merge with the SPAC

2. The post-closing directors and officers of the surviving, post-merger public company.

Why do TARGET COMPANIES need it?

Parties vulnerable to claims include the SPAC, the target private company, the new public company, and nearly everyone involved, including members of the associated financial advisory and accounting firms.

Protection is essential throughout every phase of the De-SPAC process to combat its unique set of risks, including:

Alleged wrongdoings such as conflicts of interest, inadequate disclosures, inadequate consideration and/or due diligence failures.
Emergence of a large claimant group following the underperformance of the new company, including shareholders of the newly public company, Private Investment in Public Equity (PIPE) investors, and shareholders of the SPAC.
Litigation and merger objection claims specific to the transactions
Derivatives and regulatory actions
Securities litigation
Risk of insolvency