Nasdaq expects US IPO activity to remain solid at least into early 2027.2
For companies planning to enter the public markets, securing Directors and Officers (D&O) insurance is a critical piece of IPO readiness.
Gallagher's 2027 Guide to D&O Insurance for IPOs and Direct Listings helps map the insurance placement lifecycle alongside the IPO timeline, so you can execute your D&O insurance placement with confidence.
In this article, I'll highlight just some of the steps involved in placing D&O insurance for IPOs. For more details on each step in the process, get your copy of the Guide to 2027 D&O Insurance for IPOs and Direct Listings.
Why D&O insurance matters during an IPO
As companies transition from private to public, they face increased risks of shareholder suits and regulatory enforcement actions. Appropriate D&O insurance coverage helps protect directors and officers.
According to Gallagher's 10th annual Underwriters Weigh In™ Survey, 88% of D&O insurance underwriters believe that director and officer risk will go up in 2027.
What's more, 76% of underwriters believe companies aren't as aware as they should be of the frequency and cost of D&O litigation, underscoring the importance of D&O coverage.
Placing D&O insurance for IPOs is nothing like routinely renewing a policy. It's a process with its own milestones, and each step must coordinate with a company's IPO calendar as well.
Four steps to placing public company D&O insurance
When a private company is on the path to going public, it's helpful to think of placing public company D&O insurance in four phases.
Phase 1: Preparing the strategy
The preparation phase is where IPO readiness and D&O insurance strategy intersect.
Ideally, preparation begins six months or more before going public, giving the company plenty of time to coordinate between interested parties, including both management and the board of directors.
Key steps in this stage include reviewing the private company's D&O insurance. You want to ensure adequate coverage to avoid unnecessary complications later when transitioning to a public company D&O insurance program.
This phase is also a good time to perform a governance inventory, and maybe even a tune-up. You want to be ready with policies such as insider trading and corporate communications — things that can be considered the fire sprinklers of D&O risk.
The Gallagher 2027 Guide to D&O Insurance for IPOs and Direct Listings provides more information about these foundational steps, so your company is better positioned for the right coverage when it's time to engage the insurance markets.
Phase 2: Launching the placement process
By the time your company reaches the next phase in placing the insurance program, timing is everything. Each decision should track closely with the IPO calendar.
If the company is filing confidentially, your insurance broker will first coordinate nondisclosure agreements (NDAs) with insurance carriers to keep sensitive information protected while allowing them to evaluate your risk profile.
In this phase, you'll look more closely at coverage design, conduct board briefings and facilitate employee training on public company responsibilities and procedures.
With your governance framework and internal readiness in place, it's time for your broker to take the lead in the next step: negotiating the coverage.
Phase 3: Negotiating the insurance program
During the brokering phase, the insurance program moves into active negotiation. Coverage terms can be very favorable when negotiated by a skilled broker.
This stage also brings into focus different technical aspects of the coverage, such as higher-limit warranties.
When handled well, this phase translates months of planning into a tangible protection plan for directors and officers.
Next, the focus will turn to ensuring that coverage takes effect at exactly the right moment in the IPO process.
Phase 4: Binding the coverage
At this stage, the IPO is nearly across the finish line.
This phase is all about ensuring a smooth transition from private to public D&O insurance to help avoid coverage gaps during one of the most visible moments in your company's life.
What to expect from the D&O insurance market
When planning for your IPO, one of the key costs in your budget will be D&O insurance.
Spoiler alert: It will be a lot more expensive than your private company D&O insurance.
A common mistake companies make in the budgeting process is attempting to estimate the cost of D&O insurance for an IPO based on the cost of D&O insurance for a mature public company.
Unfortunately, newly public companies tend to have less favorable D&O insurance pricing compared to their mature company counterparts.
It's useful to know that the price gap between newly public and mature public company D&O insurance pricing waxes and wanes over time. Self-insured retentions (SIRs) can also differ between the two groups.
For example, 39% of respondents in the Underwriters Weigh In™ Survey expect SIRs for newly public companies to go up (versus 12% for mature public companies).
The key to a successful D&O insurance process for an IPO is working with a D&O IPO specialist who understands the process and can provide you with customized data, not to mention support and guidance as your IPO progresses.
View the 2027 Guide to D&O Insurance for IPOs and Direct Listings to explore the full insurance placement process for IPOs.
GET THE GUIDE
Published October 2026
