M&A and Transactional Risk Insurance

FRM’s M&A and Transactional Risks team arrange tailored insurance solutions to facilitate M&A deals.

We help transaction parties and their advisors overcome challenges that can prevent a deal from completing by removing liabilities and transferring financial exposures to insurers.

Transactional Risk insurance policies, also known as ‘M&A insurance’ policies, remove uncertainty, reduce risk, and help close deals. Solutions can be provided across all industry sectors and in a wide variety of transaction scenarios, including:

Acquisitions or investments
Sales or divestments
Restructuring or insolvencies
Secondaries and fund liquidations
Tax, litigation and contingent risks
Title and real estate exposures

Our team of senior Transactional Risk insurance brokers and advisors, act for both buyers and sellers, in all industry sectors, for clients across the globe, utilising their vast experience in cross border deals to curate the most optimum and efficient solutions for our clients.

What is M&A and Transactional Risk insurance?

Transactional Risk policies are tailored insurance solutions, specifically designed to remove potential, unknown or identified risks from a transaction scenario.

Insurance policies can be created to address exposures faced by transaction parties and their advisors at every stage of the deal-making process.

Transferring potential or identified liabilities to insurers, offers stakeholders certainty and thereby facilitates efficient transaction execution.

Why use M&A and Transactional Risks insurance?

Deal facilitation –
Removes deal roadblocks and potential exposures through risk transfer to insurers, allowing transaction parties to overcome hurdles to the deal-making process and facilitate successful deal execution.

Security and reassurance –
Manages financial risk for both buyers and sellers smoothing the deal negotiation process and protecting ongoing commercial relationships.

Tactical advantage –
Replaces traditional transaction recourse mechanisms with insurance policies and enhances offers in a competitive auction process.

Access to sales proceeds –
Enhances the amount and speed of the distribution of sales proceeds, as well as the pace of deal negotiations and execution certainty.

Protection –
Protection for warranty breaches in a SPA/Purchase Agreement surrounding financial and time seller limitations, as well as certainty of payment.

Financial Security –
Offers financial security by transferring risk of financial losses arising from breaches of warranties and indemnities from transaction parties to an insurer with an investment grade rating.

Jurisdictions

Operating from London, we work with clients across the globe. With access to international insurers and specialist underwriters, we are able to service clients irrespective of location (subject to relevant regulatory and licensing permissions).

Industries

We cater to transactions in every industry sector, tailoring solutions that address key issues pertinent to that market.

Who are our clients?

We work with a variety of clients including:

Legal, financial and tax advisors
Private equity, hedge funds and asset managers
Corporates and in-house counsel teams
Insolvency practitioners and accountants
Entrepreneurs and private individuals
Consultants and other M&A professionals

Core products include:

Warranty & Indemnity (W&I)
Also known as ‘Reps & Warranties’ (R&W), respond to any breach of warranties or a claim under the tax covenant in a sale and purchase agreement.

Tax
Covers specific identified tax risks in a M&A deal or tax liabilities identified on a stand-alone basis, which may be challenged by a tax authority in the future or currently under audit or investigation.

Litigation & Contingent
Covers a wide variety of exposures including potential or on-going litigation or arbitration, regulatory and other contingent risks identified.

Secondaries & Fund Liquidation
Covers a variety of issues in the lifecycle of an investment fund, both for transfers of interests’ during and at the end of fund’s life.

Title, Real Estate & Environmental
Addresses risk relating to the legal title to shares, property and other real estate / asset exposures including pollution liabilities.

Our Difference

We understand that transactions can be complex and unpredictable.

Every transaction is unique, and so clients need insurance advisors who listen and quickly understand the crux of the challenges faced in that particular situation.

Client satisfaction is of paramount importance to us, and we always seek to go above and beyond in delivering for our clients.

There is no substitute for experience & expertise

Our team of senior professionals come from a range of advisory backgrounds to provide a complete intermediary service; from the start of the project, to its completion and beyond.

At Factor Risk we know how to translate insurance solutions into project delivery which enable clients to manage potential risks, remove deal blockers, complete the transaction and address future exposures as well.

Using our unique expertise and vast experience, we mitigate risk and maximise value for the M&A community.

Sign up to our mailing list