TrueValue M&A Network
Insurance specialists
The target’s insurance ends, changes hands or falls short on completion. An insurance specialist reviews what the business has, what it should have, and puts the buyer’s cover in place from the moment they own it.
Insurance specialists
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What insurance specialists do
An insurance broker specialising in transactions reviews the target’s policies during due diligence — what is covered, what is not, what claims history exists and what will lapse on a change of control — advises on the cover the buyer needs (property, liability, directors and officers, cyber, key person) and places it to incept at completion. They also advise on transaction-specific products such as warranty and indemnity insurance, which has its own specialists in this network.
When to engage them
During due diligence, so gaps in cover reach the negotiation, and well before completion, so new policies can be placed to start on the day. Change-of-control provisions in existing policies are easy to miss and expensive to discover afterwards.
Usually active at
- In due diligence
- Legal documents and completion
- Completed
What they typically help with
- Insurance due diligence on the target’s cover and claims
- Change-of-control and run-off arrangements
- The buyer’s programme from completion
- Directors and officers, cyber and key person cover
- Coordination with warranty and indemnity insurers
Questions to ask before you engage
- 1. How many acquisitions have you advised on, and what do you usually find in a target’s cover?
- 2. Which insurers do you place with, and are you independent of them?
- 3. How are you paid — commission, fee, or both?
- 4. What cover will lapse or change on completion, and when do you need to start placing?
- 5. Can you coordinate with a warranty and indemnity broker, or do you offer that too?
How insurance specialists are paid
Brokers are paid by commission from the insurer, a fee from the client, or a combination; ask which, since it affects the advice. A separate fee for the diligence review is common on larger deals.
How TrueValue fits alongside
TrueValue’s due diligence software carries the insurance request list beside the others, and the post-completion record on the deal holds the obligations that follow completion — including any cover a side letter requires the buyer to maintain.
Frequently asked
Does the target’s insurance transfer to me on a share purchase?
- The policies stay with the company, but many contain change-of-control provisions that let the insurer cancel or reprice. On an asset purchase nothing transfers. Either way, review the cover before completion.
What is directors and officers insurance?
- Cover for the personal liability of directors and officers for decisions made in their roles. A buyer usually wants it in place for the new board from completion, and run-off cover for the outgoing directors is often negotiated.
Is warranty and indemnity insurance the same thing?
- It is a transaction-specific product that insures the warranties in the SPA, placed by specialist brokers. It is listed separately in this network.
Listings in the TrueValue M&A Network are provided for information. A listing is not an endorsement or a recommendation, and TrueValue does not guarantee any professional’s performance. You must carry out your own due diligence before engaging anyone, verify regulated status independently with the relevant regulator, and seek qualified legal, financial and tax advice where appropriate.