IDENTIFIED RISK INSURANCE IS A BROAD CATEGORY OF INSURANCE DESIGNED TO CATER FOR AN INFINITE VARIETY OF KNOWN POTENTIAL LIABILITIES, COMMONLY ASSOCIATED WITH AN M&A TRANSACTION.
Also termed Contingent Risk Insurance, this one-off policy lasts for 7 years, 10 years or even longer depending on the liability to be insured.
The concept assumes a specific matter or scenario has been identified, often during due diligence or disclosure, and assessed from a legal perspective. Commonly neither party in the transaction will be willing to take on the long-term liability. An Identified Risk policy may break this deadlock and be an efficient and cost-effective solution to the potential exposure. It can also help a seller “dress” a business for sale.
As the M&A landscape changes and insurers broaden the scope of their underwriting authority and appetite, more and more new and innovative situations are being insured. We welcome the opportunity to talk through scenarios and find solutions in the insurance market.
Please contact us if you require more details about Identified Risk insurance.