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Entity Securities Liability Insurance

Entity Securities Liability Insurance covers your business when claims are made against your entity in conjunction with securities it has issued.


Entity Securities Liability Insurance in Thailand

What is Entity Securities Liability Insurance?

Entity Securities Liability Insurance tends to be written as an extension to a Directors and Officers Liability policy. It provides protection to the corporation for claims arising from the purchase or sale or the offer to purchase or sell securities of the corporation.

There are now stand alone policies available to protect the limits provided by the Directors and Officers Liability policy.

Entity Securities Liability Insurance should be considered for setting up a publicly listed company as this type of insurance as shareholders are now more than ever aware of their rights and the rise in litigation funding gives even the smallest shareholders an avenue to a class action.

This is the section of the Directors and Officers (D&O) Liability Insurance policy covering the corporate entity when claims are made against the entity in conjunction with securities it has issued. 

Claims covered by this section of the policy usually result from a specific corporate action that causes a drop in the market price of the firm’s securities. “Side C” coverage, as entity securities coverage is often referred to, is actually an extension of the regular coverage afforded by of D&O liability policies, for which additional premium is required.


What Protection does Entity Securities Liability Insurance provide?

Within the D&O policy, the Entity Securities Insurance section may include protection for the entity and its leadership against legal expenses and damages arising from claims related to securities. This could encompass a range of issues, such as:

Securities Violations: Coverage for claims related to alleged violations of securities laws, including issues with disclosure, misrepresentation, or other regulatory compliance matters.

Shareholder Lawsuits: Protection against lawsuits brought by shareholders related to the purchase or sale of securities, stock performance, or other securities-related matters.

Legal Defense Costs: Coverage for legal defense costs associated with securities claims, including attorneys’ fees, court costs, and settlements.

Regulatory Actions: Protection in the event of regulatory investigations or actions related to securities law compliance, where the entity and its directors/officers may face legal scrutiny.

It’s important for entities to carefully review the terms and conditions of their D&O liability insurance policies, including the Entity Securities Insurance section, to understand the specific protections and limitations provided. These policies can vary, and the language used in insurance contracts can be complex, so seeking guidance from insurance professionals or legal advisors familiar with D&O insurance is advisable.

For more information on what insurance policies your company needs and why, speak with one of our advisors. 




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