Get Mergers and Acquisitions Insurance based on your Goals
Get coverage and/or advice right away anywhere in the world with an upfront fee of $500 and a turnaround within 24hrs. Lowest cost for similar protection is contractually guaranteed. Independent of any insurance lobbyist for best compliance, operational protection, and returns.
An Overview of M&A Risks and Claims
The proportionality of different types of M&A risks and corresponding claims is more or less consistent historically.
Here is a study from SRS Acquiom showing a breakdown of M&A claims, which can be compared to the chart below it from 2013.
M&A Insurance Definition
It is insurance bought by either the Buyer or Seller or both for protection against and monetization of certain deal risks within a Merger or Acquisition, and is therefore part of the M&A risk due diligence process. M&A insurance has to be reworded and triggered independently of insurance brokers or companies in order to yield a high payout ratio on the post-closing issues of interest, all while reducing premium.
Just like all other insurance products, M&A Insurance, of which subsets include Transactional Liability Insurance or Rep and Warranty Insurance, is a second line of defence used to transfer residual risk of a specific M&A transaction. The insurance can be used across different transaction sizes and is statistically relevant given M&A claim activity as illustrated in the chart below.
The types of M&A claims have been consistent historically making M&A insurance a credible tool against such claims if structured and triggered correctly at a cost effective level. Here is a study from 2013, which when compared to the 2024 study (shown above) shows consistency in types of M&A claims.
Insurance M&A Advisor: Maximizing Risk Protection & Deal Value
An Insurance M&A Advisor plays a crucial role in mergers and acquisitions (M&A) by structuring tailored insurance solutions to mitigate financial risks, enhance deal security, and optimize transaction outcomes. These advisors specialize in Representations & Warranties Insurance (RWI), Transactional Risk Insurance, and Tax Liability Coverage, protecting both buyers and sellers from post-closing liabilities, breaches of warranties, purchase price adjustments, and legal disputes. Unlike traditional brokers, independent insurance M&A advisors conduct policy audits, negotiate optimal terms with insurers, and ensure seamless claims execution, delivering maximum compliance, lower insurance costs, and enhanced valuations. Whether you’re a private equity firm, corporate buyer, or seller, working with a specialized insurance M&A advisor ensures your transaction is safeguarded against unforeseen risks, making your deal more attractive to investors and lenders.
Contact us if you are hire an insurance M&A advisor. Management has the option of (a) outsourcing the M&A insurance procurement process to our team; or (b) relying on our analytics for their own execution with mergers and acquisitions insurance brokers.
Who are Mergers and Acquisitions Insurance Brokers?
Mergers and acquisitions insurance brokers specialize in the distribution of M&A insurance, which includes negotiations with insurers. They are not experts in structuring the fine print of an M&A insurance policy based on the operational risk of a deal, nor are they involved in the technical commercial insurance claims process when a loss occurs despite them marketing themselves as claims advocates. That is why it is important to hire an insurance M&A advisor to complement the role of an M&A insurance broker.
List of Mergers and Acquisitions Insurance Brokers
- Global: Marsh McLennan (the world's largest insurance broker); Aon Plc; Arthur J. Gallagher & Co.; Willis Towers Watson Plc; Lockton, and others.
- Regional: HUB International; LIVA; Howden M&A; Risk Strategies; and others.
- National: various M&A insurance brokers within each country.
Hire an M&A Insurance Broker
Contact us if you are looking to procure M&A Insurance. As risk advisors independent of any M&A insurance broker or company, we make brokers compete for your business and reword the fine print of the M&A insurance for best value to you, which we contractually guarantee.
Cost/Benefit M&A Insurance
To determine whether or not M & A Insurance is worth it, Buyer and/or Seller should:
(a) perform a detailed cost/benefit analysis on whether insurance is needed to protect the Purchase/Sale of a business; and
(b) aim to purchase a structured insurance policy (instead of ‘off-the-shelf’) in the event the cost/benefit analysis yields a net insurance benefit. Either Buyer or Seller can purchase the M&A insurance policy (cost can also be split amongst them).
Benefits to Seller from M&A Insurance
* Distribution of Sale Proceeds: immediate liquidity at Closing for Seller --> shown in Graph 2.
* Expedite Sale and/or increase Purchase Price --> eliminating obstacles to completion of Sale + offering greater indemnity to Buyer.
* Minimize or eliminate any contingent liabilities.
* Protect passive Sellers who have not controlled the disclosure process.
Benefits to Buyer from M&A Insurance
* Protect the deal and key relationships with stakeholders at Target company beyond Representations & Warranties (R&W).
* Ensure certainty of the Purchase Price + avoid unanticipated future expenditures.
* Extend duration of R&W --> Term of the insurance can be much longer than the term of the escrow --> protection against post escrow expiry claims (as shown in the Table below).
* Making collection easier in the event of a claim --> having a large and established insurance company as a counter-party (vs. Seller).
