Mergers & Acquisitions Insurance

Reich Insurance work with private equity, corporate clients, and their legal and financial advisors to analyse exposures and transfer risk during M&A transactions. 

Mergers and Acquisitions Insurance (M&A Insurance) is increasingly becoming a mainstream product that facilitates the smooth running of transactions. M&A Insurance comprises warranty and indemnity insurance (W&I Insurance), specific tax risk insurance and contingent risk insurance. These policies can provide cover for unknown risks or for specifically identified issues.

All policies are tailored to individual transactions and the policies are generally straightforward and typically contain few standard exclusions; they are negotiated and approved by insurers and their counsel prior to binding. 

 

Warranty & Indemnity Insurance (W&I Insurance)

W&I Insurance is a tailored product which covers either the buyer or the seller for loss arising from breach of the warranties and indemnities given in an acquisition agreement. Some of the benefits of using W&I Insurance are:

  • facilitating a clean exit for sellers;
  • minimise or remove escrow requirements;
  • provide recourse for buyers where the seller is unwilling or unable to provide recourse;
  • speed up the negotiation of warranties (often a time consuming process);
  • distinguishing a bid in a competitive auction by negotiating more limited recourse against the seller by supplementing the contractual recourse with W&I Insurance; and
  • protects a buyer’s relationship with the seller(s) who may become their key employees or business partners / management upon completion of the transaction.

 

Optional policy extensions available include:

  • Tenant default cover
  • Pollution incident and environmental 
  • Title top-up cover
  • Tax Indemnity insurance
  • Tax Liability.

 

The reasons for mergers and acquisitions can include:

  • Economies of scale/distribution
  • Increasing value through business synergies
  • Increasing market share
  • Rationalising corporate and tax structures.

 

Please also be aware that due to our close, long-term relationships with insurers, as an independent broker we are able to source products for even the most difficult transactions.

Finally, you can rest assured that when you deal with Reich Insurance, you will always benefit from our exceptional personal service, supported by an in-house claims service which we believe is second-to-none.

 

For expert advice, contact David Cramp, Business Development Executive today:

DD:      +44 (0)161 830 5464

Email:  david.cramp@reichinsurance.co.uk