IPO buyers continue to experience a highly favorable D&O market: Coverage terms are broad and pricing is competitive. We continue to see an abundance of carrier capacity. The lack of new business opportunities for insurers to write for newly public companies has led to a surge among all insurers to quote any IPO primary layer quickly and competitively. Carriers hope to secure the primary position or a low excess position on the tower because pricing for higher excess layers on IPO programs can become very low.

To capitalize on this IPO buyer’s market, work with a seasoned broker to educate and engage the market early, even if you are not entirely sure whether your company will execute an IPO within the next 12 months. Also, meet with your broker to ensure you develop an appropriate budget for the entire D&O program. Although uncertain in the early stages of planning, providing your broker with valuation guidance will enable you to review benchmarking and program design models for limits and pricing. This becomes imperative as you begin to recruit directors and other executives into the organization, as they will inquire about the current private company coverage and plans for the public company's D&O coverage.