Insurance Solutions For Risks In A Business Sale

In the current economic environment, market deterioration has set up attractive buying opportunities, particularly as companies are forced to sell off assets to satisfy debtors and support balance sheets against further market unrest. However, buyers and sellers of distressed assets or troubled companies face unique risks. Whilst bargain basement prices might incentivise buyers to close a deal, if the fundamentals of the deal are flawed, the buyer will have to line up with all the seller's other unsecured creditors in order to seek financial recourse.

Risk allocation is always difficult to address in transactional deals. Sellers usually want to exit the target as cleanly as possibly, while buyers want to ensure that there is some financial and commercial certainty around the asset or the target company, usually through the provision of warranties and other protective mechanisms in the deal terms. This is particularly so, as the due diligence process may not bring all