American International Group has launched a new insurance product to protect investors on equity crowdfunding platforms against issuer fraud.
Crowdfunding Fidelity protects individual investors against the theft of issuer assets by issuer directors, officers or employees when the theft causes a direct loss to the investor.
AIG said the coverage allows crowdfunding platforms to build investor trust and enhance the value they can offer investors by offering protection against issuer fraud.
Crowdfunding Fidelity is currently available to platforms in the U.K. and Canada. As other countries finalize regulations for companies to raise capital, the policy can be customized to local needs of equity-based crowdfunding platforms, AIG said in a statement.
Eureeca, an equity crowdfunding platform registered in the U.K. and based in Dubai, is the first platform to purchase the coverage and make it available to investors. AIG said it engaged with Eureeca to gain a deeper understanding of the crowdfunding industry’s risk exposures, ensuring that the product was designed specifically to address these needs.
Source: American International Group