Aon  |  Financial Services Group
SPACs

In recent years, Special Purpose Acquisition Companies (SPACs) have emerged as an alternative approach for raising capital. Aon is uniquely positioned to support sponsors and operators throughout the SPAC risk management lifecycle.

SPACs face an everchanging risk landscape. Transactions are complex, time-critical and highly specialized. SPAC leaders need trusted advisers who understand their goals and challenges and bring actionable knowledge to the table.


Key Considerations for SPAC D&O Programs

Insurer Selection


SPAC D&O coverage is highly specialized. SPACs typically require a multi-year policy (which aligns with expected lifespan) and exposures vary widely by industry.

Moreover, SPACs domiciled outside the U.S. often require placement in a foreign market to comply with tax, regulatory and insurance laws.


Coverage


Inherent to SPACs is an uncertainty with respect to, among other things, the target’s size, profile and industry. That uncertainty drives the need for SPAC D&O insurers to provide a significant amount of flexibility and creativity to meet insured and broker requirements with respect to coverage solutions. Examples of key insurance features include pre-agreed run-off rates (in the event of a failed transaction search process) and options to waive the “change in control” provision in certain scenarios.


Comprehensive Assessment and Comparative Analytics


Up-front premium costs are some of the most easily quantified expenses in SPAC placements. However, the total cost of risk for SPACs must be measured throughout the life-cycle and contemplate run-off, timing, and other related premium outlays. Importantly, limits adequacy is a key question – and one that our proprietary SPAC benchmarking data can validate to help achieve optimal purchasing decisions. Using its breadth of experience in this sector, our team stand ready to provide both an insurance assessment of the S-1 and targeted advice with respect to markets, program design and process.


All descriptions, summaries or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy.