Mergers & Acquisition Insurance
Protects the buyers, sellers, lenders or guarantors in private M&A
and commercial property transactions against potential future financial loss
Use Mergers & Acquisition Insurance
Whether it be a seller fund looking to minimise its liability on exit or a buyer concerned about the financial covenant of individual sellers, with the help of our partners at Lloyds of London, we can work with you to provide the security you need to facilitate the deal.
M&A Insurance is designed to protect the buyers, sellers, lenders or guarantors in a private M&A transaction against the financial loss they suffer from breach of representations, warranties and indemnities given by the seller(s) in a Share Purchase Agreement (SPA).
The products we help our clients with include Warranty & Indemnity / Representations & Warranties Insurance and Tax Liability Insurance.
Warranty & Indemnity / Representations & Warranties Insurance
Scope of coverage includes:
Why consider W&I / R&W insurance?
- Where the financial covenant of the seller is inadequate (e.g. highly indebted)
- When sellers are in unattractive jurisdictions and enforcement or recovery may prove difficult
- If the seller is likely to wind-up and distribute proceeds of the sale
- Where the Investment Committee or Lending Bank require insurance as an alternative or supplement to the protection provided by the seller(s)
- As an alternative to an escrow or hold-back
- To give institutional sellers (funds, trustees, liquidators and administrators) a clean exit
- When there are multiple sellers and claiming may prove costly and time consuming
- To enhance a potential buyer’s bid in an auction process
Use Tax Liability Insurance
Scope of coverage includes:
Why consider Tax Liability Insurance?
- Where due diligence uncovers a known tax issue and neither party is comfortable taking on the risk
- Where uncertainty or complexity in tax law enables neither party to conclude how it would apply to a transaction or series of transactions, for example:
- To enable a Seller to have a clean exit after disposal of a business and distribute proceeds
- As an alternative to escrow or hold-back
- To enable a fund or trust to be wound up
- To protect a liquidator against ongoing liabilities following a winding up
- To satisfy a buyer’s lender(s)
- Where a buyer is not satisfied with the financial covenant of the seller or the jurisdiction for enforcement of claims
Partnerships with Lloyds of London
Because of our extensive and highly specialised track record in the business insurance market, we have formed exclusive, direct relationships with many of the Lloyds of London syndicates.
Whether it be the entrepreneur, venture capital company, property developer, corporate lawyer, accountant, fund manager or adviser, this allows them the opportunity to meet and deal directly with the underwriter who will write the policy.
We have business minded management, understanding the needs of business people.
Where our competitors offer a general practitioner approach, we focus our attentions on the specific insurance needs of our clients.
We’ve gained an understanding of the insurers’ different underwriting preferences with regards to market sector, type and size of transaction, and any other apparent adverse risks.
Whilst we understand all parties need to work together to help transactions progress and complete, we never lose sight of the fact that we work with a bias in favour of our client, not the insurer.