M&A Insurance Solutions
Services specialized for
your business.
Our Approach
M&A Insurance Solutions
Every transaction requires risk attention. IMA’s team understands these needs and provides impactful insurance expertise throughout all aspects of the investment lifecycle. From pre-deal diligence to exit planning and divestiture, IMA’s team is here for your organization through every step of the transaction process.
Portfolio Optimization
Managing insurance across a portfolio of companies presents unique challenges, but portfolio programs offer significant advantages for private equity (PE) firms. Individual portfolio companies may underinsure or poorly negotiate coverage, leaving gaps in protection. By pooling insurance purchasing, PE firms can achieve cost savings, consistent coverage, and greater negotiating leverage. Portfolio programs can be customized, whether by ensuring all portfolio companies with the same carrier, combining select companies under a shared policy, or allocating premiums across multiple policies. This flexibility ensures that the program aligns with the firm’s strategic goals while addressing specific coverage needs.
Portfolio programs are particularly advantageous for certain lines of insurance, such as property or product recall, which can benefit from shared aggregate limits or excess coverage at the fund level. They also simplify administration by consolidating renewals and streamlining claims management. Additionally, PE firms may access enhanced services, such as loss control during due diligence or post-close safety training, offered by insurers for larger risks. While regulatory complexities may limit the approach for auto or workers’ compensation, the ability to pre-negotiate terms, accommodate growth through M&A activities, and secure multi-year policies make portfolio optimization a powerful tool for mitigating risk and maximizing value.
Post-Close Placement
Post-close, IMA seamlessly integrates commercial P&C due diligence findings into a full-service insurance program, ensuring a smooth transition for newly acquired businesses. Our dedicated team provides hands-on support, coordinating with new leadership to optimize risk management strategies and implement tailored coverage solutions. With comprehensive servicing capabilities, our team streamlines integration, enhances operational continuity, and delivers an elevated client experience that aligns with IMA’s commitment to long-term partnership and strategic risk management.
Executive Risk
In mergers and acquisitions (M&A), management liability coverage plays a vital role in protecting both buyers and sellers from potential exposures. A well-structured risk-transfer program demands a comprehensive analysis of the firm, its investors, investment strategies, and legal structure. Well-tailored tail coverage and go-forward programs are essential, ensuring seamless coverage at closing that will effectively coordinating historical policies and future protections.
IMA’s dedicated Executive Risk professionals bring deep industry expertise, a client-centric approach, and customized solutions to address the unique needs of each transaction. Our team specializes in structuring deal-related management liability placements, including directors & officers (D&O), employment practices liability (EPL), fiduciary, crime, and other critical coverages.
Fund Liability
This coverage protects investment funds and asset management firms against potential risks and liabilities. IMA’s Private Equity practice and executive risk team specialize in creating a solution specifically tailored to meet the needs of the financial industry.
Key features and benefits include:
- Broad Coverage: Our fund liability insurance offers extensive coverage, including protection against errors, omissions, negligence, breach of fiduciary duty, and other professional liability claims.
- Customizable Policies: We understand that every fund and asset management firm has specific requirements. Our insurance policies are flexible and can be tailored to suit the unique needs and risk profiles of your organization.
- Financial Loss Protection: In the event of a covered claim, our insurance provides coverage for financial losses incurred by your fund. This includes legal defense costs, settlements, judgments, and related expenses.
- Reputation Safeguarding: Allegations of professional misconduct or negligence can harm your firm’s reputation. Our insurance coverage not only offers financial protection but also helps preserve your professional image and maintain client trust.
- Expert Claims Handling: Our team of experienced claims professionals understands the complexities of the financial industry. We provide prompt and efficient claims handling to ensure a smooth process and minimize disruption to your operations.
Special Purpose Acquisition Companies [SPAC]
IMA understands the unique exposures emanating from SPAC IPO and de-SPAC transactions. Our team of experts help by delivering a tailored approach to program design. This ensures our clients benefit from cost-effective solutions via an intense focus on what really matters: a thoughtful D&O program structure, maximizing scope of coverage in the policy language, the quality of the insurance carrier backing, a keen awareness of real time marketplace conditions, and a deep understanding of our clients’ risk profiles.
While the sheer numbers have decreased significantly since the 2020-21 SPAC boom, SPAC offerings still offer an alternative path to becoming a public company. The SEC’s transparency and disclosure rules which took effect on July 1, 2024, will likely bring forth a more mature, experienced marketplace. D&O insurance impacts from these SEC rules, along with key considerations, are further detailed below.
If you would like to learn more about common pitfalls associated with conventional D&O program solutions, or how to strategically optimize D&O insurance protection for SPAC and de-SPAC transactions, please reach out to an IMA representative.
