The products offer the clear wording and transparency needed for the unique characteristics of special purpose acquisition companies (SPACs).
PRODUCT: Beazley's D&O Product Suite for U.S.-Domiciled Special Purpose Acquisition Companies (SPACs)
BEST RATING: A
AVAILABILITY: Appointed agents and brokers only.
FOCUS: The number of special purpose acquisition companies (SPACs) has grown exponentially in the last decade. In 2011, there were only 15 SPAC initial public offering (IPO) transactions in the U.S., according to SPACInsider. In 2020, there were 248 SPAC IPO transactions, the most ever. By the beginning of June 2021, there were already 330 for the year.
Only a handful of carriers offer directors & officers coverage for SPACs. Beazley is stepping in to address this dramatic need for capacity.
“The specialized needs of SPACs have historically been met through endorsements to traditional D&O contracts," says Jim Rizzo, executive risk underwriter, Beazley. “In contrast to much lengthier forms for D&O coverage, the new Beazley products are streamlined and specifically designed for SPACs and their officers and directors at a time when heightened regulatory scrutiny, media attention and an increasingly active plaintiffs' bar make it critical that they have appropriate coverage and fully understand what that coverage is."
COVERAGE DETAILS: Beazley's new D&O products for SPACs offer dedicated coverage for either the individuals or the entity and individuals combined, to provide greater transparency and clarity about insurance coverage. Policies are designed for the unique characteristics of a SPAC, providing a simplified contract with clean, clear wordings and fewer endorsements and more transparency, clarity and certainty around what's covered—enabling quicker decision-making by underwriters and claims teams.
The certainty around the product is exemplified by the up to 24-month policy term and the fact it is non-cancellable by both the insured and Beazley. Coverage includes a six-year run-off that is contractually predetermined at inception; a one-year optional extension period, which is available when there is no business combination; book and records coverage, and claims made and reporting trigger. A primary A-side only offering is also available, as well as surplus lines capacity on both a primary and excess basis.
UNDERWRITING: Applications must include a copy of the SPAC draft registration statement or form S-1 as filed with the Securities and Exchange Commission.
TARGET: Beazley's new products are designed for organizations and the directors and officers of SPACs—from the initial raise of funds through to the hunt for a target company for up to 24 months following the IPO.
COVERAGE AVAILABILITY: U.S. and U.S-listed SPACs.
COVERAGE TERRITORY: All U.S. 50 states and the Cayman Islands.
CONTACT: Jim Rizzo, executive risk underwriter, Beazley, 45 Rockefeller Plaza, New York, NY 10111; 212-801-7144.
Will Jones is IA editor-in-chief.