What insurance does a biotech IPO require?

A biotech IPO requires substantial expansion of the insurance program beyond what was needed at clinical-stage. The IPO underwriter representations are the forcing function: underwriters require specific coverage minimums and program structures to be in place before the offering closes.

Primary D&O typically expands from $5M-$10M at Phase 2 to $10M-$25M at IPO. Side A coverage is boosted to handle the IPO-period exposure. A separate transactional D&O placement at $25M-$50M is structured specifically for the offering itself, with runoff coverage scoped to the post-IPO statute of limitations window. Public offering of securities insurance (POSI) provides additional coverage for the offering.

Cyber insurance is typically reviewed and expanded at IPO; the underwriter cyber diligence is materially stricter than pre-IPO and often requires SOC 2 attestation, formal incident response plans, and zero-trust architecture documentation.

Standard E&O, employment practices liability, fiduciary (for the company-sponsored 401(k)), and clinical trial liability coverage continue at appropriate levels. Most operators upgrade these at the same IPO-readiness review.