Our corporate site Contact us

Initial Public Offerings

An initial public offering (IPO) marks a significant milestone for many businesses, but the IPO journey carries many risks. Marsh's FINPRO specialists have extensive experience helping companies understand and manage these risks before, during, and after the IPO.

IPOs have long been a traditional way to raise capital and transform from a private entity to a publicly traded company. This transformation, however, comes with a complex set of risks and exposures for the business and its directors and officers, potentially threatening their personal assets.

In addition to complying with federal securities laws, public and soon-to-be public companies face increased scrutiny from investors, regulators, plaintiffs' attorneys, and members of the public. With required financial and operational disclosures, public companies are not only exposed to securities lawsuits, but also may face litigation relating to patents, trademarks, copyrights, and trade secrets.

Marsh’s team of financial and professional liability specialists combines deep industry expertise with a data-driven approach to help you manage risk at every stage of an IPO.

We’ve distilled that experience into a new executive guide for senior leaders. The report, Navigating IPO risks: A comprehensive guide for senior leaders, explains how the changing IPO market and regulatory environment can alter exposures before, during, and after going public. It clearly outlines key risks — such as securities class actions, derivative suits, indemnification issues, and roadshow liabilities — and explains how timely, well-structured directors and officers liability (D&O) insurance programs, targeted underwriting advocacy, and specialized coverages can protect both the corporate balance sheet and executives’ personal assets.

The guide also demonstrates how comprehensive data analysis, such as those provided by Marsh’s Blue[i] D&O analytics, can help better understand and address IPO risks. We provide practical steps for preparing, negotiating, and binding a D&O program that enables companies to manage evolving risks throughout the IPO journey.

*as of 12/31/2025

FAQs

Companies that pursue IPOs face scrutiny from the moment they announce their intentions. Initial filings and roadshows designed to attract investors can draw attention from regulators, the public, and plaintiffs' attorneys.

Some of the biggest risks during the IPO journey include:

Inadequate preparation: Companies that intend to become public may need to upgrade their accounting, reporting systems, and governance practices. Companies may wish to enlist the assistance of financial, legal, and risk professionals with experience serving public companies. Beginning this work prior to the IPO can smooth the transition.
Failure to complete the IPO: The inability to execute an IPO may be interpreted as an underlying problem and trigger litigation.
Misleading statements: Statements and disclosures are critical information for investors. A materially misleading statement or omission can become the basis of a lawsuit against the company, and its directors and officers.

Becoming a public company adds new responsibilities to the roles of directors and officers, including public reporting and performing their functions in the public eye. Providing training and professional resources to help management improve its governance practices and compliance with applicable laws is an important step. Indemnification provisions in the company bylaws are another way to shield directors and officers from the costs of defending claims arising from their decisions. Litigation can put their personal assets at risk. In addition, companies going through the IPO process should udate their insurance coverage in line with new risks.

Directors and officers liability (D&O) insurance is available for private as well as public companies. This specialized protection comes in three forms: Side A, B, and C. Side A provides coverage specifically for directors and officers when the company is unable or unwilling to indemnify them. Side B provides reimbursement to the company for indemnifying its directors and officers. Side C provides coverage for the company against securities claims made directly against it.

Soon-to-be public companies should consult Marsh risk specialists well ahead of a planned IPO to identify and design an appropriate D&O insurance and risk management program.

Start planning about 90 days before filing the registration statement (Form S‑1). That timeline allows for program design, insurer meetings, quote analysis, and binding coverage so the policy is effective when the registration statement becomes effective. Confidential filings may require additional steps (NDAs) before documents are shared with insurers.

SPACs have become a popular alternative to traditional IPOs. A SPAC is a shell entity that undergoes an IPO with the intention of using the capital raised to acquire a private operating company, typically within two years. Through a process known as a de-SPAC, the acquired company becomes public, and the SPAC entity dissolves.

SPAC sponsors face many of the same risks as traditional IPOs. One difference is that the SPAC is not an operating company and has no revenue, so its disclosures may be simpler than a traditional IPO.

A private company considering an acquisition by a SPAC should work with a trusted risk advisor to prepare for becoming public and evaluate whether it has adequate D&O insurance in place.

Marsh’s risk specialists have extensive experience helping public and private companies identify, mitigate, and transfer risks, so the businesses can continue to focus on achieving their growth plans no matter what IPO strategy they pursue.

Improve disclosure accuracy and governance practices, conduct thorough legal reviews of prospectuses and roadshow statements, maintain strong internal controls, and use data-driven risk assessments to shape D&O program design. Consider forum-selection or arbitration provisions (where permissible) and clear indemnification and advancement policies to limit litigation exposure.

Initial Public Offerings

The report includes insights into:

Building an effective D&O program

Analytics’ role in informing insurance decisions

Protecting leaders and the balance sheets

In 2025, the playbook was rewritten — IPOs surged like never before. But here’s the truth: if your insurance strategy isn’t razor-sharp, you’re leaving opportunity, and capital, on the table.

470+

202

42%

44%

FAQs

Related insights

Increased filings and underwriter appetite mark IPO landscape

D&O coverage considerations ahead of an IPO

Protecting IPO companies from investment bank indemnification costs

Download the report

Marsh.com Sign in

Initial Public Offerings

The report includes insights into:

Building an effective D&O program

Analytics’ role in informing insurance decisions

Protecting leaders and the balance sheets

Navigating IPO risks: A comprehensive guide for senior leaders

In 2025, the playbook was rewritten — IPOs surged like never before. But here’s the truth: if your insurance strategy isn’t razor-sharp, you’re leaving opportunity, and capital, on the table.

470+

202

42%

44%

FAQs

What are some of the biggest risks in IPOs?

How can companies protect their directors and officers?

When should a company going through an IPO buy D&O insurance?

What risks do special-purpose acquisition companies (SPACs) pose?

How can companies reduce the chance of post IPO litigation?

Related insights

Increased filings and underwriter appetite mark IPO landscape

D&O coverage considerations ahead of an IPO

Protecting IPO companies from investment bank indemnification costs

Download the report