Mergers & Acquisitions Insurance
Mergers & Acquisitions Insurance. Transaction Liability Insurance. Warranty & Indemnity. Representations & Warranties…
Lot’s of names for insurance that is designed to protect companies from losses arising during or after a Merger or Acquisition
Available Insurance Products
Make sure you are covered for all eventualities with our comprehensive cover options
Warranty & Indemnity (W&I) insurance covers losses arising from breaches of warranties and indemnities given as part of an M&A transaction. This coverage helps protect the assets and financial health of the acquiring party.
In video game industry M&As, warranties often cover intellectual property rights, software code integrity, and compliance with relevant digital media laws.
Contingency insurance covers specific risks that have been identified as part of a transaction and would therefore not typically covered by W&I/RWI insurance.
An example of this could be a claim of ownership over IP from a 3rd party that was still ongoing during the transaction but not fully resolved yet. This could have a very small chance of succeeding, but if upheld could zero the value of a transaction. Any buyer would be naturally worried about this so could purchase a contingency policy to take that risk off the table.
Tax insurance is specifically designed to protect against potential tax liabilities that might arise from interpretations of tax laws or disputes with tax authorities after an M&A transaction.
A tax contingency insurance claim might be triggered by disputes or assessments from tax authorities that challenge the tax treatment of a transaction, unexpected tax liabilities arising from interpretations of tax law, or issues with the execution of tax strategies that were thought to be compliant. This typically includes situations where the actual tax implications differ significantly from those anticipated at the time the insurance was purchased, leading to additional tax costs.
Peace of mind for all parties...
Whether you are selling a business or buying one, M&A insurance can provide both parties with peace of mind that any transaction liability issues post-sale can be dealt with and paid for by the insurer. Traditionally, M&A insurance covers the buyers risk, but we also have an innovative new product that can protect the seller. This effectively provides them peace of mind that once they have sold the business, they can relax.
Many SME business owners who are looking to exit their businesses may be unaware of the potential liabilities arising from their sale, as well as the full extent of cover available to them when they strike a deal with a buyer. Warranty and Indemnity (W&I) Insurance has not been available to small and micro M&A deals, and we are one of the first to fill this gap in the market.
When do I need Mergers & Acquisition Insurance?
There are a number of scenarios our Mergers & Acquisition Insurance is relevant.
Your first and only M&A transaction
If this is your first time doing an M&A transaction, you may not be aware that your buyer will require you to provide certain seller warranties about your business. These warranties cover everything from compliance with laws and regulations, to tax matters and even financial statements.
If a warranty is proven to be inaccurate, even if by accident, as the seller you’ll be responsible for reimbursing the buyer for the loss they subsequently incur. This in turn reduces the proceeds you earn from the deal. Most first-time sellers aren’t aware that insurance now exists to provide cover for this exposure to provide peace of mind that you’ll be protected in the event that any of the warranties you give turn out to be wrong.
Retire after selling your
business
You may find yourself in a position where you’ve successfully grown your small business and decide to cash in on your hard work by selling to an investor. Whether you are looking to retire or invest using the proceeds of your business sale, we understand it is vitally important for you to realise the value you worked hard to build.
You should have complete peace of mind that your proceeds will be protected and our M&A policy – tailored to SME deals – can cover you for the full indemnity given by the seller in the sale agreement, up to $20M USD. This minimizes the risk of having to hand back some, or all, of your proceeds as a result of an innocent breach of contract.
Breach of sale contract not covered under existing liability
You may think that your management liability policy will offer you protection for the risks connected to your deal, but it can only go so far when you’re selling your business. Most management liability policies exclude losses arising from contractual breaches. This means that any losses arising specifically from a breach of a representation given by the seller will not be covered.
On the other hand, a Warranty & Indemnity insurance policy from GG Insurance Services provides completely different cover, and will protect you completely in the case of a breach of contract.
Guarantee against innocent misrepresentation
Every seller has the best of intentions, and even though you may have full confidence in your company’s track record, it’s impossible to guarantee the integrity of your suppliers, investors, business partners and even employees.
A breach of warranty can result in significant financial losses and business sellers can’t rely on a third-party to indemnify them in the case of a buyer claim. A fit-for-purpose policy will help protect your business sale proceeds and provide cover for defence costs arising from the claim of an inaccurate warranty.
Why do I need insurance with GG?
We listen to understand your requirements to understand exactly what you need.
Understanding Risk
We work with a wide variety of companies across the entire global games industry, regularly consulting industry-leading lawyers and working alongside them to understand and manage risk. This insight and access to specialist expertise allows us to provide the best possible advice, products and services to our clients, enabling us to talk you through the relevant options for your business.
Flexible Policies
The Games Industry is fast-moving and your insurance should always be ready to move with you. Signing a big deal with a new publisher could change the face of your studio overnight, and you need to be ready. Unlike other providers, we do not charge any administration fees to make policy changes throughout the year and are always happy to hear from you about new developments to your business.
The Right Cover
We recognise that every client of ours, large and small, has highly unique and business-specific requirements. At GG, we will talk you through all the options available to you and advise on the right cover, based on up-to-date legal advice and our unparalleled expertise. We pride ourselves on working with our clients to build a policy that meets their bespoke needs, with the covers you want and/or need to have.
Are you ready to find out more?
Get in touch today to transform your insurance cover and give you the reassurance you need.