A company’s merger and acquisition decisions present unique risk management challenges, many of which are not readily identified from a mere examination of a company's contracts and financial statements. Even experienced accountants and attorneys can find the task difficult. Overlooking risk management issues could give rise to unforeseen liabilities and costs after the acquisition is completed. Many a failed acquisition has led to lawsuits against directors and officers. And in many cases the prime cause was a failure to recognize all liabilities and exposures attendant with the acquisition, even when the merger was intended as merely a purchase of assets! Given the tight timeframe within which most mergers and acquisitions need to be consummated, ICA’s consultants can be invaluable due diligence team members. They will provide the confidential support and expertise the client’s accountants, attorneys and management team need to evaluate the acquisition from a risk management perspective.
ICA’s Mergers & Acquisitions Due Diligence Consulting Service includes the following:
- Assist in developing a checklist of documents to be obtained and questions to be asked, from a risk management perspective, to properly evaluate the acquisition.
- Review the target company’s assets, locations, operations and exposures and advise on how these could affect the Client’s future insurance coverage availability and premiums.
- Review the Transaction Agreement and advise on matters relating to insurance and risk management, vis-a-vis the target company’s products and operations liability, employee benefits, environmental matters, workers compensation, plant closings and severance, etc.
- Review the target company’s claims filed (both accepted and denied) under all lines of insurance, discontinued operations and products, and advise the Client on potential hidden liabilities and costs from retrospectively rated programs, retentions, self-insured plans, “tail” and “terminal” liability obligations.
- Advise on minimizing the risks of financial loss with respect to the loss exposures assumed by the Client on account of taking over leases and other contracts.
- Analyze “hold harmless” and “indemnification” clauses in the Transaction Agreement and other critical agreements made available, suggesting changes for the Client to review with its counsel to meet the Client’s risk transfer objectives.
- Advise the Client on compliance and notice requirements under the Client’s and the target’s insurance programs triggered by the acquisition, such as “Discovery” period elections.
See our Complete List of Consulting Services.