Underwrite

To Underwrite means to accept financial responsibility for something, often a risk or venture. This can involve guaranteeing financial support, usually in the event of a loss or failure, or to sign an agreement in which one promises to buy all or a part of a new security issue if it cannot be sold to other investors. Underwriting also encompasses endorsing or supporting an activity, cause, or idea, effectively giving it legitimacy or backing. It reflects a commitment to cover potential costs and ensures a level of security or guarantee for the undertaking.

Underwrite meaning with examples

• The insurance company agreed to Underwrite the homeowner's policy, promising to cover any damage from natural disasters. Their careful risk assessment ensured a manageable exposure. This guaranteed financial protection for the homeowner and a predictable business outcome.
• The investment bank decided to Underwrite the company's initial public offering (IPO), purchasing all unsold shares. Their actions facilitated the listing of the company on the exchange and created stability by taking on any share market risk.
• The foundation chose to Underwrite the research project, offering a grant that covered all of the project expenses. Their financial commitment allowed the scientists to pursue this vital research, creating confidence.
• The corporation made a move to Underwrite the local art festival, supporting the community and boosting their public image. This sponsorship provided financial backing, allowing the festival to attract top artists and bigger crowds.
• A coalition of philanthropists decided to Underwrite the construction of a new homeless shelter, covering the construction costs. This act would offer resources to the local community.