Uncovering Insurance Issues in M&A – What Every Firm Needs to Know
In the past year, M&A insurance activities continues to expand its reach and companies around the world along with financial and foreign buyers took a step higher into developing and strengthening their businesses. In this two-hour LIVE Webcast, a seasoned panel of leaders and professionals assembled by The Knowledge Group will offer the audience with an in-depth discussion of the fundamentals as well as updates surrounding Insurance needs of Ds&Os, businesses, and selling stockholders that arise in connection with public and private mergers and acquisitions. The panel will also provide the audience with the latest insights and trends with regards to the domination of smaller and mid-market deals to M&A activity growth in the M&A market.
Key topics include:
- M&A Insurance - An Overview
- M&A Insurance Due Diligence
- Caps on Pre-Merger Ongoing Litigation Risk
- Target Company D&O Defense in Merger Litigation
- Caps on Tax Risk Exposure Risk
- Risk Management Procedures
- Assessment Procedures of Insurance Arrangements
- Transactional Liability Insurance
- Transactional Insurance Policies
- Transactional Insurance Products
- Effects of High Growth Markets in M&A
- Regulatory Developments in M&A Insurance
- basics of transactional insurance and reasons for growth in transactional insurance use
- claims experiences
- how we underwrite M&A deals
- policy and key negotiation points
- how we connect and provide solutions with other more traditional insurance
Pepper Hamilton LLP
- Does RWI remove the moral hazard that drives Purchaser/Seller negotiation and disclosure?
- Is RWI a substitute for traditional indemnification?
- How is RWI used to differentiate bidders in a transaction?
- How do parties generally cover retention, premium and uncovered risk?
Squire Patton Boggs
- Due diligence of any M&A transactions requires compiling all outstanding insurance policies of the entity to be acquired, for example, Directors & Officers Liability policies, Comprehensive General Liability Policies, E&O Policies, Fideltiy & Surety Policies, All Risk Policies, Cyber Risk coverage. Determine if there is a need for Contingent Liability Insurance for any known claims which require additional coverage.
- What the Reps and Warranties policy does not cover: MAE risks, including breakup fees associated with occurrence of MAEs; Adjustment of purchase price ; Other exclusions; Covenants, basket/deductible provisions, expiration of reps and warranties; caps on reps and warranties.
- Obligations to insurer in the event of a claim which is subject to indemnification as a rep and warranty breach under the purchase agreement
Amy Stewart PC
- Focus on making sure the insured understands scope of coverage. Common misperception = “if anything goes wrong, we have coverage”. Seems likely that increased use of RWI will spawn increased disputes.
- What damages are covered and are there disputes on this front? (If the panel has dispute examples, would be very interested in exploring the interplay between policy provisions and potential confusion about what the policy will pay.)
- Subrogation provisions – provision that insured is required to defend counterclaims and third-party claims that stem from subro claims. Confusing, since those claims might be independently covered. We seek to eliminate this language, so the policy’s terms govern without the confusion arising from the context in which the claims are asserted.
- Enhancements we seek—(1) allocation of 100% of defense costs to covered claims; (2) pre-approval of defense counsel (perhaps this is common?); (3) clients want to eliminate the arbitration provision—no success to date.
- May be heavily manuscripted; not standardized (although more so that RWI!)
- Very broad for private companies; much more limited for public companies.
- May need to take steps to ensure that newly acquired entity is covered under buyer’s D&O. Larger acquisitions may require new subsidiary to be formally added, potentially with additional underwriting.
- When seller company ceases to exist, so does D&O policy. Seller liabilities, however, remain, including those arising from the decision to enter into the deal.
- Tail coverage needed for wrongful acts prior to closing, whether or not related to the deal.
- New entity’s policy will likely impose a prior acts date that precludes coverage for pre-closing wrongful acts.
- Tail should be longer than SOL for potential claims in any potentially relevant jurisdiction—6 year tail advisable.
- Price for tail may have been negotiated already. Consider incorporating this cost into the M&A transaction.
- Cyber tail? What if the acquired entity did not have cyber coverage?
Who Should Attend:
- M&A Lawyers
- Insurance Lawyers
- M&A Professionals
- Insurance Brokers
- Insurance Professionals
- M&A Insurance Advisers
- Global Insurance Markets
- Private and Public Companies
- Other related/interested Professionals and Organizations
Jay Rittberg leads AIG’s Merger & Acquisition Insurance Group for the Americas and is responsible for managing the development, underwriting and marketing of transactional insurance products in the US, Canada and Latin America, including representations and warranties insurance. Jay regularly speaks on panels and advises law firms, private equity firms, corporations and insurance brokers on the use of transactional insurance.
Prior to his current role, Jay served as Division Counsel for the Mergers and Acquisitions Insurance Group. Jay joined AIG in 2007, after spending five years with Schulte Roth & Zabel LLP, where he advised clients on a wide range of corporate matters, including corporate finance and mergers and acquisitions.
Jay holds a B.S. in Industrial and Labor Relations from Cornell University, and a J.D. from the University of Pennsylvania Law School. In 2013, Jay was named as one of the winners of M&A Advisor's 40 Under 40 Awards.
Jay Rittberg leads AIG’s Merger & Acquisition Insurance Group for the Americas and is responsible for managing the development, underwriting …
James D. Rosener is a partner in the Commercial Department of Pepper Hamilton LLP. Mr. Rosener heads the firm's International Practice Group, is managing partner of the New York office and has served as a member of the firm’s Executive Committee. His practice is devoted primarily to international transactions, private equity, mergers and acquisitions and corporate financing.
Mr. Rosener has represented domestic and foreign private equity funds in transactions in more than 70 countries throughout the world, including platform and follow-on acquisitions; distressed buyouts, including in bankruptcy; corporate carve-outs and restructurings. He also has represented U.S.-based companies in transactions throughout Europe, Latin America and Asia (particularly, India and China), as well as several European, Indian, South American and Japanese companies in merger and acquisitions, financing and licensing transactions involving the United States. In addition, he also has represented management-led groups in the acquisition of businesses from divesting corporations.
James D. Rosener is a partner in the Commercial Department of Pepper Hamilton LLP. Mr. Rosener heads the firm's International …
John Nonna litigates complex commercial disputes, particularly those involving insurance and reinsurance, involving a range of business matters. Mr. Nonna is particularly well-known for his work in complex insurance and reinsurance disputes and he has handled several of the largest reinsurance arbitrations on record.
As a litigator, Mr. Nonna is known for his innovative approaches to complex cases. He has tried jury and non-jury cases in the areas of accountants' malpractice, fraud, breach of fiduciary duty, breaches of warranties and representations, employment discrimination, distributorship agreements, stock and asset purchase agreements, and M&A disputes.
Mr. Nonna is a Fellow of the American College of Trial lawyers. He has lectured at numerous conferences on topics including trial practice, arbitration and mediation, insurance and reinsurance coverage, commercial torts and the attorney-client privilege.
Mr. Nonna served as Mayor of Pleasantville, New York and as a Westchester County Legislator where he chaired the Legislation Committee.
John Nonna litigates complex commercial disputes, particularly those involving insurance and reinsurance, involving a range of business matters. Mr. Nonna …
Tarron Gartner-Ilai joined the firm as a principal in 2014, bringing with her more than 25 years of experience representing both carriers and policyholders in first-and third-party insurance coverage litigation, including general liability, errors & omissions, directors & officers liability, oil & gas, cyber liability, commercial property, specialty risk, disability, bond and fidelity disputes. Earlier in her career, Tarron spent close to a decade as a Second Vice President of an A+-rated insurer, first as a Managing Claim Coverage Counsel, and later as a General Counselor, giving her direct insight into the inner workings of insurers, how they operate, and how the decision-makers think.
Now focused solely on the representation of policyholders, Tarron’s business and management experience, coupled with her legal acumen, enables her to provide a broad range services to her clients, including coverage analysis and litigation skills, risk management, and insurance program reviews. We call her our “secret weapon.”
Tarron Gartner-Ilai joined the firm as a principal in 2014, bringing with her more than 25 years of experience representing …
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American International Group, Inc. (AIG) is a leading global insurance organization serving customers in more than 100 countries and jurisdictions. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.
Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIGinsurance | LinkedIn: https://www.linkedin.com/company/aig
About Pepper Hamilton LLP
Pepper Hamilton LLP is a multi-practice law firm with more than 500 lawyers nationally. The firm provides corporate, litigation, intellectual property and regulatory legal services to leading businesses, governmental entities, nonprofit organizations and individuals throughout the nation and the world. While our practice is remarkably diverse, we operate as a unified firm, using our size, depth of talent and the latest technology to assist our clients.
Our firm has grown from a two-person law office formed in 1890 in Philadelphia to a sophisticated, large law firm with a national and international practice. While much about Pepper Hamilton is new and different from its beginnings, we retain traditional values passed down through the decades: respect for the rule of law, pride in an excellent work product and commitment to the client’s cause. Today, Pepper Hamilton is a diverse firm of men and women from a broad spectrum of backgrounds, united in these values.
About Squire Patton Boggs
Squire Patton Boggs is one of the world’s strongest integrated legal practices. With 44 offices in 21 countries, the firm is renowned for its local connections and global influence, delivering comprehensive legal services across North America, Europe, the Middle East, Asia Pacific, and Latin America. With expertise spanning all key sectors, the firm is also known for its preeminent public policy practice and deep-rooted relationships in Washington DC and Brussels.
About Amy Stewart PC
Amy Stewart PC is an insurance coverage boutique that represents policyholders in disputes with their insurance companies. The firm regularly represents clients in disputes involving the existence and scope of coverage, violations of state insurance regulations and consumer protection statutes, bad faith, claim resolution, and mediation.