Managing the Risk and Insurance Implications of Corporate Transactions

Although mergers, acquisitions, and other corporate transactions are announced almost every week, insurance is rarely mentioned. But if prior claims materialize after the closing, the form of the transaction — asset sale, stock purchase, or merger — can have a significant impact on insurance recovery under a predecessor’s general liability (GL) insurance policies.

Companies involved in M&A transactions must understand the implications of a transaction’s structure on their insurance programs.

In any form of acquisition, risk managers — and their companies’ legal advisors — must address this key question: If a successor company assumes the liability of a target, does the insurance coverage procured by the predecessor follow the liability, allowing the acquirer to recover?

In “Managing the Risk and Insurance Implications of Corporate Transactions,” we cover the insurance implications of corporate transactions, providing details on:

• How courts tend to view anti-assignment provisions in general liability programs.
• Exceptions to the general rule that a seller’s liability does not attach to the assets sold in an asset transaction.
• Transactions best practices to help rein in exposures.