Mergers & Acquisitions

Insurance Products that Help Secure the Deal

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Merger and acquisition targets often take months or even years to identify, and closing the transactions may take months or years more. Even the wisest and most hard-won acquisition can be destroyed in a matter of minutes by an uninsured or underinsured loss, taking along with it the value of the time and effort that went into the transaction. Owens Group helps our clients ensure that the fruits of those labors are protected against unexpected losses.

Due Diligence

Professionals who are regularly engaged in the business of acquiring companies recognize that acquisitions present both towering opportunities and significant risks. For this reason, potential Mergers & Acquisitions are regularly subjected to a thorough due diligence process. This may include reviews of management, operations, structures and insurance coverage. Owens Group regularly performs due diligence reviews, and evaluations of a potential investment’s insurance programs on behalf of Private Equity firms and other acquisition groups.

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Representations and Warranties Liability

The allocation of liabilities and risks between the parties in a merger or acquisition is one of the most fundamental and difficult aspects of any transaction. Representations and Warranties Liability insurance protects the insured against unintentional or unknown breaches of a seller’s representations and warranties in the purchase agreement. It can also free up any cash that previously languished in escrow.

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Specific Contingency

 Specific Contingency Insurance (SCI) provides coverage for known and specific issues that arise between the buyer and the seller in a merger or acquisition. The purchase of an SCI policy can indemnify the buyer for the financial impact of a specific contingency, thereby converting a contingent liability into a certain, and often deductible, expense — and help to facilitate the transaction. Owens Group can lend their expertise in crafting and securing an SCI policy that is ideal for a particular merger or acquisition.

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Tax Indemnification

Tax Indemnification insurance is designed to reduce uncertainty relating to tax issues involved in Merger & Acquisitions. A Tax Indemnification policy ensures that a specific tax issue, if challenged by a relevant authority, will be interpreted as intended by the parties engaged in the transaction.

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Litigation Buyout

Sometimes when the selling company in a transaction is involved in an ongoing litigation issue, a financial resolution of the issue between the buyer and seller is simply not enough. The buyer wants not only to be made whole in the event of an adverse ruling, but also wants a third party to take over the entire litigation process. This is where Litigation Buyout insurance can help. When an organization is covered by a Litigation Buyout policy, the insurance company steps in and takes over the defense, along with any financial impact associated with it.

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Pollution / Environmental

Environmental, or related, issues can threaten the feasibility of Mergers & Acquisitions, or make them less attractive to a buyer. Several insurance solutions exist to help address both known and unknown issues in these types of transactions, and can help facilitate a successful outcome.

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Personal Directorship Liability

Personal Directorship Liability (PDL) is a personal liability policy for independent directors that responds when certain losses are not indemnified by their companies, or not paid by other Directors’ & Officers’ Liability insurance.

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Portfolio Company

The nature of the Private Equity industry means that PE professionals are regularly engaged in evaluating and designing insurance programs for a variety of portfolio companies; but that doesn’t mean that you need to reinvent the wheel with each transaction. Owens Group provides expertise in tailoring policies for a broad range of industries, and can identify the best fit for your companies — for both focused and diverse portfolios.

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