Record levels of cash on company balance sheets, cheap financing, and the elimination of political uncertainty following the November presidential election have led many analysts to predict an uptick in M&A activity in the near future. If your company expects to acquire (or be acquired by) another company, it is critical to conduct a review of insurance for the buyer and the seller early in the process. The true cost of a transaction may be much higher than anticipated if liabilities emerge post-sale that are not covered by adequate insurance. This alert outlines key insurance issues a company should address, and due diligence steps it should take, as it approaches a merger or acquisition.

Do Your Insurance Due Diligence -

To guard against the risk of inadvertently acquiring uninsured liabilities, the due diligence process must include a focused assessment of the seller’s liability exposures and insurance coverage. Important steps include...