Usually written as an extension to a Directors and Officers Liability policy it provides protection to the corporation for claims arising from the purchase or sale or the offer to purchase or sell securities of the corporation.

There are now stand alone policies available to protect the limits provided by the Directors and Officers Liability policy.

The largest claims paid under Directors and Officers Liability policies in Australia have been paid under this extension (Aristocrat Leisure, GIO and Sons of Gwalia are three such claims).

Any publicly listed company should consider this type of insurance as shareholders are now more than ever aware of their rights and the rise in litigation funding gives even the smallest shareholders an avenue to a class action.