Transactional risk insurance
M&A insurances cover risks of liability and loss in connection with corporate transactions such as mergers, acquisitions, demergers, transformations and asset transfers as well as the purchase/sale of individual assets. Tough negotiations are characterized by widely differing interest of the parties involved. The buyers interest is to maximize his claims in the event of damage against the seller and to achieve a maximum of contractual guarantees and indemnities from the seller; whereas the seller interest is to minimize his liability in order to be able to keep more of the purchasing price in case of a damage. Misjudgements, incorrect valuations or insufficient guarantees can lead to substantial pecuniary losses both for the buyer and seller. With an integral M&A insurance we ensure that critical issues between the parties will be eased and that risks arising from inapplicable or inaccurate contractual commitments can be shifted.
TYPICAL EXAMPLES OF DAMAGE
Three years after selling the company, a liability becomes imminent which despite the most thorough entrepreneurial and legal examination could not be foreseen at the point in time of sale.
A mistake concerning the financial statement at the time of purchase leads to a wrong decision directly after the purchase. The mistake is only discovered years later and the seller is sued retrospectively.
The seller fraudulently falsifies company figures which leads to an incorrect valuation in the due diligence process. As a consequence, the buyer suffers a substantial financial loss.
Compensation for pecuniary losses as a consequence of a breach of contractual warranties and seller indemnity
Cover of claims for damages arising from breach of warranties
Preservation of value of the buyer’s investment
Cover of tax risks as well as other transaction-related special risks
Acceleration of transactions due to shift of risks
YOUR CONTACT:
CHRISTIAN PEDAK
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