A Family Office bought a Canadian manufacturer with a protection from post-close deal risks including property and business interruption events, liability events, and credit events. This included Transactional Liability (TL) insurance at a substantially discounted cost than originally presented to the Buyer by the Insurance Broker.
Challenge
A Canadian Family Office (Buyer) wanted to find solutions to hedge risks of the Target they had unraveled during their Due Diligence stage. The Buyer also wanted to shop around for better deals on the TL insurance, aka. Rep and Warranty Insurance, that was quoted to them by their insurance broker.
Discovery
We discovered that the TL insurance quotation given to the Buyer, which included the insurance premium and add-on broker fees, was priced at a significant premium for what the same insurance policy from the same insurance company, and with the same terms and conditions, can otherwise be sold for.
Impact
- Significant cost savings were achieved on TL insurance all while maintaining the same Broker, Insurer, and Terms
(> 50% of savings off initially quoted premiums and fees).
- Successfully structured insurance for other risks that fell outside the scope of this deal’s original TL insurance.