Corporate Risk Insurance Analyzing Transactions, Understanding the Targets and Mitigating Risk

Our Transaction Services team offers complete corporate risk insurance due diligence services related to platform, add-on and divestiture transactions, including:

Insurance & Risk Management Assessment

  • Evaluate coverage to identify program gaps and/or restrictions
  • Review insurance contract provisions and recommend changes
  • Analyze historical loss patterns, and project losses and reserve requirements
  • Develop new or revised program design for go-forward Property and Casualty and Management Liability programs to be placed concurrent with closing
  • Determine expected run-off liability costs
  • Prepare post-closing insurance budgets for pro-forma financials and the subsequent post-close insurance programs
  • Assess adequacy of loss prevention, workplace safety and business continuity programs
  • Provide peer group benchmarking for insurance limits, deductibles/retentions and premiums by line of coverage

Transactional Assessment

  • Inspect joint venture agreements to determine insurance and any transactional obligations
  • Review the insurance and indemnity provisions in company contracts to determine extent of contractual risk exposure
  • Analyze purchase and sale agreements to determine assumption of liabilities
  • Evaluate historical purchase agreements to determine assumption of liabilities from previous acquisitions/divestitures
  • Assess the impact of change of control provisions contained within current insurance contracts
  • Ensure compliance with lender insurance requirements necessary for a seamless transaction closing

Financial Assessment

  • Evaluate pre- and post-close total cost of risk (TCOR)
  • Determine appropriateness of self-insured retentions
  • Conduct claim reserve analysis to assess collateral and balance sheet requirements
  • Identify outstanding letters of credit or escrow deposits that may be reduced or consolidated post-close and any new collateral required under revolvers
  • Recommend transactional insurance solutions including Representations and Warranties
  • Review financial ratings and the solvency of insurance carriers