By insuring against certain risks, our solutions enhance and facilitate significant transactions - creating shareholder value and peace of mind.
Buy Side
Buying a business can be challenging in today's market. Buyers can utilise insurance products to help protect them and also improve their offer. For example:
Distinguish your bid in a competitive auction by negotiating more limited recourse against the seller by supplementing the contractual recourse with W&I insurance.
Protect your relationship with the sellers who may become your key employees or business partners upon completion of the transaction.
Protect yourself against any potential future tax liability by utilising one of our tax liability products.
Sell Side
How we help sellers
Our insurance products can support sellers protect themselves and overcome any obstacles blocking a potential acquisition. For example:
Expedite a sale and potentially increase the purchase price by eliminating obstacles to closing, such as protracted indemnity negotiations.
Reduces the buyer's concerns about a potentially adverse challenge from a tax authority.
Transforms contingent and inherently uncertain claims into a quantifiable insurance cost allowing for balance sheet certainty.
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A tailored product for companies considering a merger or acquisition, which covers either the buyer or the seller for loss arising from breach of the warranties and indemnities given in an acquisition agreement (SPA).
Sellers can obtain a clean exit by using W&I insurance to ensure that the sale proceeds can be returned to investors and avoid the need of an escrow account. Buyers can procure warranty protection on transactions where the seller is reluctant to give warranties or where there is doubt over the seller’s ability to satisfy a claim.
Tax Liability Insurance can reduce or eliminate a loss arising from the successful challenge by a tax authority of a taxpayer’s position. Potential tax risks are typically identified during due diligence pursuant to a potential acquisition of a company and may have lied dormant within a target for many years. A buyer may have to proceed with a transaction or investment where there is uncertainty in the application of tax law or inadequate time to obtain an advance tax ruling. The risk for the buyer is that the tax position of the target could be challenged by a tax authority, which could lead to a material reassessment of their liability to tax and could include interest, fines and penalties. Similar issues could arise where a group is rationalising its or its target’s corporate structure either pre or post an M&A transaction.
A tailored insurance product that quarantines a client from the uncertainties inherent in outstanding litigation whether those uncertainties relate to the outcome or to the eventual amount of damages awarded. LBI will either cap an insured’s financial exposure or remove it altogether and will be designed to meet the particular needs of the insured and the specific characteristics of the dispute.
LBI enables clients to ring-fence liabilities which may arise from any current or anticipated litigation, arbitration or other dispute. This may be particular useful in an M&A context where an unresolved dispute would otherwise prevent an acquisition proceeding or would have a significant impact on the purchase price. An LBI policy can transform the inherently uncertain liability of litigation into a quantifiable insurance cost which can enable the parties to the transaction to focus on the business being acquired.
Underwriting and cover are tailored to each case, allowing the policy to be adapted to a dispute, regardless of its subject matter. As such, LBI can be adapted to cover proceedings ranging from a simple breach of a supply contract, a more complicated employment issue through to highly complex securities litigation and intellectual property disputes.