AXA XL, Europe’s second-largest insurance company, who made $2.6 billion profit in 2018, has announced that it is partnering with New York-based Assurely, an Insurtech startup, to offer insurance cover for firms that are involved with Crowdfunding and or Security Token Offerings (STOs).The new product is called CrowdProtector and provides issuers protection against investor complaints and lawsuits so investors may get their principal investment returned should the issuer misuse the funds, purposefully misrepresent information in their offering documents, or steal the money.
This is significant as institutions, as part of their due diligence process, look for issuers to have insurance arrangements in place prior to investing. Historically investing in small businesses and start-ups had largely been the preserve for wealthy investors and specialist funds. However, with the advent of Crowdfunding and now STOs smaller investors are able to get access to what are often start up companies, so this insurance cover is welcome to potentially offer protection to these often less sophisticated investors.
