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Plenty has been written about the recommended steps when preparing to list on the stock exchange – mainly around the importance of appointing a team of suitably experienced and trusted advisers including a stockbroker, lawyer, accountant, auditor, and company secretary.
However, the absence of any reference in these articles to including a suitably qualified insurance broker in the IPO Team is a massive oversight. Considering that ensuring a suitable insurance program is in place is critical to managing the risks involved in undertaking an IPO, this is very strange indeed.
"The decision to list is a significant one requiring management to investigate and upgrade every aspect of the business."
Then again, this oversight is not surprising when you consider how often the insurance implications of business decisions are an after-thought or even overlooked entirely. The decision to list is a significant one requiring management to investigate and upgrade every aspect of the business to ensure it is battle-ready for life as a listed entity. Surely insurance deserves a seat at that table.
De-risking a business through insurance is fundamental, so it defies logic for any IPO Team not to include an insurance broker experienced in dealing with the insurance challenges involved in listing. This is a very important point, because listing requirements are different from the usual operational insurance challenges.
As with other professional advisers, it is often the case that the insurance broker the business has relied on for many years does not have the necessary experience or skills to help take the business to the next level. It is for this reason that we often see companies change lawyers and accountants as they prepare to list. The same logic needs to apply to their insurance needs.
Selecting the right insurance broker to be included in your IPO Team will be a question of finding a broker with the expertise to help you meet those challenges and who you feel comfortable working with. With that in mind, this series will explore – over the coming weeks and months - the specific insurance challenges which listing on the stock exchange presents.
If your business is at, or about to be at, this point, then these insights should prove invaluable.
Of course, if you can’t wait that long, give us call, we'd love to chat.