Transactional Risk Insurance in M&A: Reps and Warranties, Contingent Liability and More

Leveraging Insurance to Allocate Risk and Protect Deal Value; Negotiating Coverage and Exclusions

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, April 27, 2017
Recorded event now available


This CLE webinar will provide deal counsel with a review of the latest trends in the use of transactional risk insurance as a strategic tool to allocate M&A deal risks to an insurer. The panel will discuss the different types of transactional risk insurance available - from representations and warranties to tax indemnity to successor liability to fraudulent conveyance - and the various situations in which each type is appropriate. The panel will also discuss the benefits and traps associated with each type of insurance and key considerations when negotiating coverage and exclusions.

Description

Buyers and sellers are increasingly using transactional risk insurance as a strategic tool to allocate the risks of M&A deals to an insurer. Transactional risk insurance provides deal parties with a way to protect deal value and serves as an effective mechanism to close deals.

Sellers can use transactional risk insurance to minimize exposure to post-closing indemnification liabilities, and buyers can use it to enhance their bids in competitive processes. Both can use the insurance to resolve issues when negotiations reach an impasse.

The most sought-after types of transactional risk insurance are representations and warranties, contingent liability, tax indemnity, fraudulent conveyance, successor liability, litigation, cyber and customized environmental insurance.

Deal counsel and other professionals should be aware of the types of deals that are best suited for the different types of transactional risk insurance and potential issues that can arise in structuring and negotiating coverage and exclusions.

Listen as our authoritative panel reviews the ways transactional risk insurance can be effectively used in M&A deal negotiations, the benefits and pitfalls associated with the different types of insurance, and factors to take into account when negotiating coverage and exclusions.

Outline

  1. Current trends in transactional risk insurance
  2. Evaluating each type of transactional risk insurance
    1. Buy-side vs. sell-side policies
    2. Benefits and pitfalls
    3. Key considerations
  3. Negotiating coverage and exclusions

Benefits

The panel will review these and other key issues:

  • What current trends should deal counsel be aware of with respect to transactional risk insurance?
  • What are the potential benefits and pitfalls associated with the different types of transactional risk insurance?
  • How can transactional risk insurance be used to mitigate deal risk and complete transactions?
  • What are some of the key issues to consider when negotiating coverage and exclusions?

Faculty

Toria Lessman, VP, Underwriting Leader for Transactional Liability Practice
QBE North America, Chicago

Ms. Lessman has more than a decade of insurance industry experience in product development and underwriting, primarily focused on management and professional liability coverage. In her current role, Ms. Lessman is responsible for underwriting, marketing and developing transactional insurance products, including representations and warranties insurance and tax liability insurance. In her previous role, Ms. Lessman was a key member of the Specialty Product Development Team, where she helped engineer the launch of 29 specialty insurance products.

Scarlet McNellie, Partner
Norton Rose Fulbright, Dallas & Houston

Ms. NcNellie has experience representing public and private companies in the energy, insurance, technology, media, healthcare, and banking sectors, in mergers, acquisitions, divestitures, and spin-off transactions, securities transactions including equity and debt offerings, tender offers, rights offerings and exchange offers, power and alternative energy transactions, compliance work with respect to federal and state securities laws and SEC, NYSE and Nasdaq rules and regulations, corporate governance matters, private equity transactions and venture capital investments.

George H. Wang, Partner
Barton, New York

Mr. Wang focuses his practice on mergers, acquisitions, joint ventures, investments and broad-scope business transactions on behalf of clients in North America, Asia and Europe. He represents clients on domestic and cross-border M&As, private equity, venture capital and related transactions. He also serves as de facto general counsel for the U.S. operations of several global clients, providing his strategic legal experience in completing multijurisdictional M&A transactions as well as corporate, joint venture, strategic alliance and licensing matters and general legal advice.


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Mergers and Acquisitions Law Advisory Board

Charles H. Baker

Partner

O’Melveny

Igor Kirman

Partner

Wachtell Lipton Rosen & Katz

Kevin C. Logue

Partner

Paul Hastings Janofsky & Walker

Mark D. Williamson

Principal

Gray Plant Mooty

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