ACE Group introduced this week three new insurance products to protect against loss associated with merger and acquisition transactions. The policies include representations and warranty insurance, tax indemnity insurance and contingent liability insurance.
The new products come at a time in which an average of 10,000 people each day will reach age 65—the traditional age for retirement and succession planning. As the number of M&A deals rises and insurance increases their value, demand for such products has grown.
“We have seen a significant increase in placement requests for transactional risk products over the past couple of years. In some instances, these have doubled from one year to the next,” said Steven Goldman, senior vice president, Professional Risk, ACE USA. “Deal participants recognize that these coverages offer the high degree of sophistication that complex transactions require.”
Goldman will oversee the growth of ACE’s Transactional Risk initiative, alongside Edward Markovich who will focus on underwriting transactional risk in North America as vice president of the division.
The products are designed specifically for financial institutions such as strategic buyers and sellers, private equity sponsors and business owners with advisors and managers.
The three key offerings in the transactional risk product line include:
- Representations & warranties insurance protects the insured for financial losses in the event of unknown breaches of a seller’s representations and warranties made in connection with an acquisition or merger.
- Tax indemnity insurance protects the insured against known contingent tax exposures resulting from the tax treatment of a past transaction, investment or other legitimate business activity.
- Contingent liability insurance protects the insured against known exposures that may arise after the close of a transaction, such as successor liability, open-ended indemnities and/or potential litigation.
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