Is your company ready to go public within the next 12 to 18 months?

The initial public offering (IPO) market experienced a significant resurgence in 2025, marking the most active year since 2021. Despite considerable headwinds, including market volatility, tariff concerns, persistent inflation and the longest government shutdown in U.S. history, companies raised over $47 billion in IPO proceeds in 2025.1

Key drivers supporting a strong 2026 IPO market

  • Renewed investor confidence following stabilization of market conditions
  • Lower interest rates creating a more favorable financing environment
  • Substantial backlog of late-stage private companies poised to go public
  • Improved market performance across major indices

While January 2026 saw slower activity than initially anticipated, most market experts project robust IPO activity for the remainder of the year. Even the special purpose acquisition company (SPAC) market has demonstrated renewed momentum, with 144 SPAC IPO transactions completed in 2025, a notable increase from 57 in 2024 and 31 in 2023.2 There may also be an increase in the number of direct listings, which may offer some advantages from an underwriting perspective.

The IPO journey: What to expect

The IPO process is both intensive and demanding for private companies. Preparations typically begin 12 to 18 months before the actual listing date, requiring careful coordination across multiple workstreams.

Company-side preparations

  • Filing registration statements (such as Form S-1) with the SEC
  • Conducting investor “roadshows,” a series of presentations in different cities designed to create investor interest
  • Implementing enhanced reporting systems and controls
  • Enacting potential board composition changes
  • Meeting stringent SEC filing and disclosure requirements

Insurance-side preparations

The foundation of IPO insurance preparation is the company’s private directors and officers (D&O) policy. It’s essential to structure this policy with appropriate roadshow coverage and pre-negotiated run-off protection. Early engagement with D&O insurers, ideally months in advance, is critical and typically includes:

  • Comprehensive review of registration documents (S-1) and transaction structure
  • Underwriting meetings with senior management to provide insurers with deep business insights
  • Meticulous policy language review to ensure best-in-class terms and conditions
  • Analytics-driven program structure optimization

Current market conditions

The public D&O market for IPOs remains highly competitive, and this favorable environment is expected to continue throughout 2026. Retentions and pricing have continued to decline, though rates vary based on individual risk profiles. Program structures typically feature broad coverage components, with prior acts coverage (or “nose coverage”) for roadshow exposures readily available. This competitive landscape is supported by substantial capacity across U.S., Bermuda and London markets.

IPO exposures and litigation landscape

Exposures

While going public is one of the most exciting milestones in a company’s lifecycle, it is also when litigation risk spikes dramatically. Whether it’s a failed IPO, accounting irregularities or claims that the company didn't deliver on its promises, IPO litigation is a reality every company needs to anticipate and prepare for.

The first exposure that a company may face is roadshow litigation. As discussed briefly above, a company typically embarks on a roadshow before an IPO. This process is critical because the enthusiasm generated during the roadshow often determines how well the IPO performs. The presentation includes company history, executive credentials, mission and vision, historical financials, growth projections and the purpose behind going public. However, if any of those statements are later alleged to be misleading – or if the IPO fails – roadshow litigation can follow.

The next type of IPO exposure is the more commonly known federal securities class action claim. There are two main statutory vehicles for IPO-related securities claims and understanding their distinction matters. First, Section 11 of the Securities Act of 1933 creates liability for material misstatements or omissions in the registration statement or prospectus (i.e., the documents that lay out what the IPO proceeds will fund, the business plan, risk factors and executive compensation). What makes Section 11 particularly dangerous is that it is essentially a strict liability provision. Plaintiffs do not need to prove the company intended to deceive anyone; they just need to show the disclosure was materially false or misleading. Section 11 claims can be brought against the company, its directors and officers, and the underwriters.

Section 10(b) of the Securities Exchange Act of 1934 is the other major exposure point. Unlike Section 11, Section 10(b) applies to actively traded securities after the IPO and requires plaintiffs to prove scienter (i.e., the company or its executives intended to deceive, manipulate or defraud investors). Plaintiffs must also show reliance on the misstatement and resulting damages. Section 10(b) cases typically arise after a corrective disclosure triggers a stock price drop. The further removed a company is from its IPO, the more likely any securities lawsuit will be framed as a Section 10(b) claim rather than Section 11. In some factual circumstances, plaintiffs will bring a Section 11 and Section 10(b) claim together.

There is one key distinction between Section 11 and 10(b) claims: Section 10(b) claims can only target the people who actually made the statements – typically the company and certain officers and directors. Underwriters generally aren't named in a Section 10(b) claim.

Litigation landscape

In 2025, there were 207 securities class action lawsuits filed.3 Of those, 12 involved IPO companies, or roughly 6% of all federal filings.4 But here's what's interesting: These weren't all 2025 IPOs. The breakdown included:

  • Five cases from 2025 IPOs
  • Six cases from 2024 IPOs
  • One case from a 2023 IPO

This underscores an important point that IPO litigation exposure doesn’t end right after the IPO – it can extend years beyond the offering itself.

Looking ahead, as the IPO market gains momentum, we’re likely to see more litigation filings in 2026 and beyond. IPO litigation activity historically follows IPO volume, and the plaintiffs’ bar is always looking for targets.

Yet another trend to watch is that AI companies face heightened securities litigation risk. AI-related filings jumped to 16 in 2025, and as more AI companies gear up for IPOs, their litigation exposure may climb even higher.5 “AI-washing" claims (i.e., allegations that companies overstated their AI capabilities or market potential) are becoming a distinct category of securities fraud litigation.

The bottom line is that going public creates significant litigation risk, and that risk doesn't disappear after the IPO roadshow ends. Companies need a strong understanding of how Section 11’s strict liability standard can turn even honest mistakes into expensive problems. With the IPO market heating up and AI popularity at an all-time high, 2026 could bring more securities litigation activity than in prior years. The D&O insurance market continues to evolve, and now is the time to strategically prepare your company for this critical transition.

Ready to begin your IPO journey? Contact a HUB ProEx Specialist today to learn how our specialized team can support your transition to public markets. View more articles in our ProEx Advocate Articles & Insights Directory.

NOTICE OF DISCLAIMER

Neither HUB International Limited nor any of its affiliated companies is a law firm, and therefore they cannot provide legal advice. The information herein is provided for general information only and is not intended to constitute legal advice as to an organization’s or individual’s specific circumstances. It is based on HUB International’s understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect, and HUB International does not have an obligation to update this information. You should consult an attorney or other legal professional regarding the application of the general information provided here to your organization’s specific situation.

1EY, “2025 IPO activity fuels confidence in 2026,” January 28, 2026.
2SPAC Insider, “SPAC Statistics,” February 12, 2026.
3Cornerstone Research, “Overall Size of Securities Class Action Filings Reached New Heights in 2025,” January 28, 2026.
4The D&O Diary, “Federal Court Securities Suit Filings Declined Slightly in 2025,” January 4, 2026.
5Cornerstone Research, “Overall Size of Securities Class Action Filings Reached New Heights in 2025,” January 28, 2026.