Chartis, a property-casualty and general insurance firm, has launched a Investigation Edge, a new insurance solution to cover company costs arising from Securities and Exchange Commission (SEC) investigations, including those related to internal investigations.
Developed by its executive liability division, Investigation Edge solution covers legal expenses, discovery costs and insurable settlements resulting from investigations by enforcement authorities – including the SEC and the Department of Justice – into insider trading, restatements, accounting fraud and reporting violations.
Chartis said that the coverage is also available via endorsements for investigations into Foreign Corrupt Practices Act violations and derivative investigations.
Following the credit crisis and subsequent uncertainty caused by financial reform legislation, securities law enforcement has become a top priority for the SEC and related governmental agencies, Chartis said.
The proposed SEC staff increases, whistleblower incentives in the Dodd-Frank Act and global enforcement collaboration, signal a new level of investigative intensity, as a result publicly traded companies face a higher likelihood of becoming the target of costly multi-front securities investigations than ever before.
Chartis president of executive liability Michael Smith said brokers and insureds have asked for an insurance solution to address the growing concerns about the cost of SEC and related investigations.
"Regardless of the effort to avoid wrongdoing, when issues arise, the costs from the ensuing government investigation can be staggering, irrespective of the outcome. We designed Investigation Edge to specifically address this growing exposure," Smith said.