Businesses considering merger and acquisition opportunities must practice due diligence to ensure potential business partners don't come with hidden risks. Bukaty Companies Property & Casualty knows asking the right questions is vital to identify and mitigate potential liabilities. Keep these business insurance considerations in mind when evaluating merger and acquisition (M&A) activities.
What is the claims history of the target company?Bukaty Companies Property & Casualty recommends requesting a five-year history of loss runs. Investigating the target company’s claims history can reveal past issues that impact future claims or premiums.
Does the target company have any coverage gaps?
Any deficiencies or gaps in the target company’s current coverage may leave you exposed to risk after an acquisition is complete.
Is the indemnification clause sufficient?
Review the indemnification provisions in the acquisition agreement to ensure they adequately protect you against any unforeseen liabilities.
Is the target company compliant with state and federal requirements?
Investigate any outstanding compliance violations. If the target company operates in multiple states or jurisdictions, consider any local regulations that may impact insurance coverage.
What is the policy integration plan?
Preparation is key. Strategize how the target company’s insurance programs will be consolidated or integrated during the business transition. Budget and create a contingency plan for any additional insurance costs incurred. Verify if policies can be transferred post-acquisition or if new policies must be issued.
Who can provide the right support and insurance advice?
Refer to the experts. Bukaty Companies Property & Casualty has a team of trusted risk advisors and specialists ready to assist in merger and acquisition transitions.
Contact Bukaty Companies Property & Casualty at 913.951.2400 for more information.
