Beazley launches specialty D&O coverage for SPACs

PLC on Tuesday launched a range of directors and officers liability coverages for special purpose acquisition companies.

A spokeswoman for the London-based insurer said in an email that would offer Side A, B and C coverage – which could cover individuals or corporate entities involved with SPACs – and would typically offer limits of $2.5 million or $5 million.

“These are bespoke policies designed for the unique characteristics of a SPAC to provide a simplified contract with clean, clear wordings and fewer endorsements,” the email said.

SPACs, which are sometimes called blank-check companies, have seen a surge in popularity over the past year. A wide variety of companies have used the structures as a means of going public without going through a traditional initial public offering.

will offer up to 24-month initial policy terms “designed to cover the typical life cycle of a SPAC,” the spokeswoman said, and the coverage is noncancellable by either party.

The coverage is available to U.S.-domiciled and the initiative is led by Jim Rizzo, executive risk underwriter at in New York.

According to the website .com, there were 248 formed in 2020, compared with 59 in 2019, and there have been 232 formed so far this year.

While are often viewed as a quicker and more efficient means of raising funds than an IPO, the Securities and Exchange Commission issued an investors bulletin on in December warning that the economic interests of a SPAC’s management team and directors and officers “often differ from the economic interests of public shareholders.” Several SPAC-related shareholder have already been filed.

Source: Business Insurance – Beazley launches specialty D&O coverage for SPACs