Insurance Due Diligence In Mergers, Acquisitions

This article was originally published in the Policyholder Advisor, Volume 23, Issue 5 (November/December 2014)

Insurance policies represent a significant asset class that is often overlooked by the people who work on mergers, acquisitions and spin-offs. Insurance professionals — usually risk managers and attorneys — are an often overlooked human asset that can help their employers and clients protect themselves when making such deals.

Insurance: A Matter of Due Diligence

When acquiring or merging with another company, your first task will be to ask your negotiating partners for insurance policies and loss history data, and possibly to have that same information organized and available on your side. Be aware that a company that is or was a subsidiary might be entitled to coverage under multiple insurance programs: its own program, its parent's program, and possibly those of additional companies that were previously part of its corporate history.