What is POSI
This is an insurance cover for the wrongful acts of a company and its directors arising from the issue of a prospectus. The cover may also include claims by the underwriter or sponsor of the floatation arising from warranties and indemnities given by the company or the directors personally in agreement with the underwriter and sponsor.
The Need of POSI
A corporate entity when raising capital through capital markets by inviting investors and by publication of a prospectus and sale of unlisted securities renders itself to the scrutiny of Regulators, New Shareholders, Customers and competitors. The Directors and officers of that entity, the entity itself, shareholders and/or advisors, lead managers etc can face potential liabilities arising from public act of issuing shares.
The SEBI Act and the Listing Agreements under the Companies Act in India and similar laws and acts provide regulations which govern the possible liabilities of persons responsible for the prospectus to anyone who purchases those securities and suffers a loss as a result of false or misleading information provided in the prospectus. The liabilities arising out of the prospectus can be significant given the considerable amounts of money that are usually involved in capital raising transactions. Directors and Officers , Employees, Issuing Entity , underwriters and any other party associated with the issuance of the prospectus can be held liable for misrepresentations, mis-statements, wrongful disclosures, false revenue recognition and improper accounting practices, assumptions and forward looking statements .
Coverage:
Who are Insured:
The Company and its directors, officers and employees for securities claims brought against them in connection with the offering
Exclusions:
For any insurance solutions, please contact Beacon Insurance at https://www.beacon.co.in/
Insurance is a subject matter of solicitation
Image Name: Contested Waters Image Credit: The Hindu Tensions between China and Japan became much…
Image Name: Trudeau Leadership Image Credit: Bloomberg The Liberal Party of Canada has reached a…
Image Name: Mike Bullard Image Credit: CTV News Toronto Canada lost one of its most…
Image Name: Rugby Australia Image Credit: The Guardian Rugby Australia returns to Melbourne Rebels court…
Image Name: Jenna Fischer Image Credit: The New York Times Actress Jenna Fischer, famously known…
Image Name: Raptors' Rookie Image Credit: Sporting News Dick is all set for a good…