Mergers & Acquisitions Insurance
Decrease risk and add value to your transactions while establishing peace of mind - regardless of your industry
What is Mergers & Acquisitions Insurance?
M&A Insurance - or Transactional Risk Insurance - is a set of protections designed to help both buyers and sellers mitigate risk and facilitate the closing of a deal. For instance, buyers and sellers are often concerned about how contractual guarantees, taxes, or ongoing litigation might impact a merger or acquisition.
HUB can tailor an M&A Insurance solution to address these types of concerns and provide the peace of mind to expedite negotiations.
In every transaction, the seller makes contractual guarantees (known as Representations & Warranties) that establish the mutually agreeable conditions under which a sale can be made. Representations & Warranties Insurance policies facilitate transactions by bridging negotiating gaps on indemnification for breaches of these guarantees.
Representations & Warranties Insurance is a win-win solution for buyers and sellers. It is an added layer of protection for buyers to ensure the veracity of the seller's guarantees - and can also make the seller feel more comfortable in providing more extensive guarantees. This can reduce or even eliminate the amount of escrow required, which would free the seller from a heavily negotiated aspect of a deal and allow a buyer to make a more attractive and differentiated bid in a competitive process.
Litigation Buyout Insurance - also known as contingent risk insurance - is another risk mitigation tool for buyers, protecting them against currently pending litigation that the seller is facing. Policies can be tailored specific to the needs of a buyer, and can "ring-fence" particular risks associated with known and ongoing suits of all types, including class action, non-class action, and anti-trust suits.
During M&A negotiations, liabilities for pending litigation are often heavily negotiated - and often impacts the indemnities or amount of escrow required. Litigation Buyout Insurance can help remove this potential point of contention, thereby helping both sellers and buyers come to an agreement sooner.
Tax Indemnity Insurance policies provide recourse for a buyer at risk of an inadvertent error in the tax treatment of a historical, pending, or future transaction. These policies can even protect against future adverse rulings by federal tax regulatory bodies.
During M&A negotiations, tax liabilities are often heavily negotiated - and often impact the indemnities or amount of escrow required. Tax Indemnity Insurance can help remove this potential point of contention, thereby helping both sellers and buyers come to an agreement sooner.
How Representations and Warranties Insurance can protect you from breaches
Both buyers and sellers can utilize this tool to minimize the uncertainty in a transaction
3 common claims that can derail your next M&A
Learn how tax issues, international transactions, and worker misclassification impact mergers and acquisitions
