AIG Introduces Crowdfunding Insurance
American International Group (AIG) has launched a new insurance product developed specifically to protect investors on equity crowdfunding platforms against issuer fraud.
The new Crowdfunding Fidelity product from AIG protects individual investors against the theft of issuer assets by issuer directors, officers, or general employees which cause a direct loss to the individual investor.
By subscribing to product, AIG believes crowdfunding platforms will enhance the value they can offer investors by offering protection against issuer fraud. Although there have been limited instances of fraud in this sector so far, this new product could help build investor trust in the sector by working to ensure underlying issuer trustworthiness.
AIG indicated that the coverage is currently available to platforms in the UK and Canada. As other countries finalize regulations for companies to raise capital, this policy can be customized to local needs of equity-based crowdfunding platforms.
“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, President of Liability and Financial Lines. “This new product will help provide that confidence and help to support this asset class as it matures.”