Insurance titan
AIG has launched an industry-first insurance product particularly designed to protect investors on equity crowdfunding platforms against issuer fraud.
The Crowdfunding Fidelity product, which is currently available in the UK and Canada, shields individual investors against the theft of issuer assets by issuer directors, officers, or general employees that cause a direct loss to the individual investor.
Crowdfunding platforms will enhance the value they can offer to investors by subscribing to the new product, AIG said.
The product also helps build investor trust in the emerging industry of crowdfunding investment by working closely with the platforms to ensure underlying issuer honesty.
“As a sector still in its infancy, equity crowdfunding platforms are only as strong as the confidence they instill in their investors,” said Lex Baugh, AIG president of liability and financial lines.
“This new product will help provide that confidence and help to support this asset class as it matures,” he added.
Eureeca, a UK-registered equity crowdfunding platform based in Dubai, is the first platform to purchase the coverage.
AIG engaged with Eureeca to better understand the risk exposures of the crowdfunding investment industry and to ensure that the new product will specifically address the sector’s needs.
As other countries finalise capital-raising regulations for companies, the new product can be customized to the local needs of equity-based crowdfunding platforms, AIG said.
