What it does
MP 00 02 combines executive liability for directors and officers with entity securities liability, covering the organization itself for securities claims as defined in the form. Private companies that raise capital from investors face securities claims against both the managers and the company.
Program context
The ISO Management Protection (MP) program is a modular management liability policy: Common Policy Conditions (MP 00 03) shared by separate coverage forms for executive liability (D&O), executive and entity securities liability, financial institutions executive liability, not-for-profit management liability, fiduciary liability and Side A only. Forms lists show the Management Protection forms filed for use in Colorado, Iowa, Illinois, Indiana, Kansas, Minnesota, Missouri, North Dakota, Nebraska, Ohio, South Dakota, Wisconsin and Wyoming. The 10 06 and 05 09 editions are the current ones in forms lists; ISO filed a multistate Management Protection forms revision in 2008.
Who needs it
Private companies with outside equity investors, private placements, crowdfunding or employee stock programs.
Quoting and selling notes
- Ask about recent or planned capital raises; public offerings are typically excluded with MP 21 07 (initial public offering) or MP 21 08 (secondary public offering) unless underwritten.
- Confirm whether the carrier offers entity securities coverage for the class before quoting MP 00 02 rather than MP 00 01.
- Review investor agreements for indemnification obligations.
