Mergers & Acquisitions Due Diligence

 

A merger and acquisition presents unique risk management challenge.   Even experienced accountants and attorneys can find the task difficult. Overlooking risk management issues could give rise to unforeseen liabilities and costs after the acquisition is completed.  There have been many a failed acquisition and resulting lawsuits against directors and officers caused by a failure to recognize all liabilities and exposures associated with the acquisition.  Mergers and acquisitions often need to be consummated on a short timeline and HRC’s consultants can be invaluable due diligence team members. They will provide confidential support and expertise to the client’s accountants, attorneys and management team in order to evaluate the acquisition from a risk management perspective.

HRC’s Mergers & Acquisitions Due Diligence Consulting Service includes the following:

 

  • Assist in developing a checklist of documents and information to be obtained from a risk management perspective to properly evaluate the acquisition.

  • Review the target company’s assets, locations, operations and exposures and advise on how these could affect the client’s future insurance coverage availability and premiums.

  • Review the Transaction Agreement and advise on matters relating to insurance and risk management, visa-a-versa the target company’s products and operations liability, employee benefits, environmental matters, workers compensation, plant closings and severance, etc.

  • Review the target company’s accepted and denied claims filed under all lines of insurance, discontinued operations and products, and advise the client on potential hidden liabilities and costs from retrospectively rated programs, retentions, self-insured plans, “tail” and “terminal” liability obligations.

  • Advise on minimizing the risks of financial loss with respect to the loss exposures assumed by the client on account of taking over leases and other contracts.

  • Analyze “hold harmless” and “indemnification” clauses in the Transaction Agreement and other critical agreements made available, suggesting changes for the client to review with its counsel to meet the client’s risk transfer objectives.

  • Advise the client on compliance and notice requirements under the client’s and the target’s insurance programs triggered by the acquisition, such as “Discovery” period elections.