After the PSA Is Signed, but Prior to Closing
In this stage of the transaction, we begin the process of integrating the two companies’ insurance programs. If the two companies have similar operations, it is usually beneficial to combine them into a single insurance program; however if operations are vastly different, they may need to be insured separately. We review the insurance and indemnity sections of all current contracts in place in order to assure that the new insurance complies with all requirements. The last step in the process is providing a thorough proposal with our recommended insurance program well before the actual closing date.
Following are some of the specifics we look for:
Management Liability – Throughout the process, both the acquiring and acquired companies make certain representations to customers, investors, and each other. In certain situations, the individual directors and officers can be held personally liable for misrepresentations and breaches. We will assist you in creating a comprehensive Management Liability program in place well before closing to help mitigate the potential personal liability, as well as liability to the entities themselves.
Property / Business Income – We review the property schedules and BI worksheets to verify that the current limits are adequate. We also review the deductibles on current policies, and recommend any changes that make sense post-closing.
Workers’ Compensation – We add any new locations, add classification codes (if necessary), and update payroll figures. As mentioned previously, the experience modifier could change post-closing, which would be reflected in our proposal.
General Liability – Similar to the Workers’ Compensation, we would add new locations and update the exposure basis with post-closing estimates. We will also explore options at varying deductible levels.
Excess / Umbrella Policies – We review current limits, and provide benchmarking and claims data to help you determine to what level you wish to insure.
Pollution Liability – Throughout our due diligence process, we will have uncovered potential environmental liabilities. If there are known environmental claims outstanding, coverage to cap cleanup costs is available. We will put together a comprehensive program to cover both legacy and future claims.
Employee Benefit Consulting – During this stage our team designs a benefit strategy and provides the tools and resources that allow for a smooth benefit transition. We evaluate and negotiate pricing for optimal rate and network discounts. Our proprietary industry benchmarking data is used to maintain a competitive edge. We build an effective benefit package and the communication material that provides the employees with all the information they need during the transition.