Mergers & Acquisition (M&A) Insurance
Platinum Management Liability Insurance is able to arrange, place and manage all your Mergers & Acquisition (M&A) Insurance requirements.
Warranty and Indemnity Insurance
Warranty & Indemnity Insurance ('W&I') helps protect a seller or buyer from financial loss resulting from inaccuracies in the representations and warranties provided by the seller as part of an acquisition or sale of a company or a business. Since the transaction documentation and process will vary depending upon the nature of a particular transaction, each W&I policy is tailored to address the unique requirements of each transaction.
The underlying loss typically covered by the W&I policy is the loss resulting from an inaccuracy of the warranties and indemnities relating to the acquired company or the acquired business. In most transactions, one of the most heavily negotiated sections of the acquisition agreement is the section setting forth the warranties and indemnities relating to the acquired company or the acquired business. These warranties provide critical information to the buyer about the company or business it is acquiring and lay the groundwork for indemnification in the event the company or the business is not what the seller purported it to be. Because these warranties have the effect of allocating a great deal of risk in a transaction, most applicants for W&I insurance request coverage for all or some of these warranties and indemnities.
Either a seller or buyer of a business can be the named insured under a W&I policy and can also be extended to cover other parties, including a 'newco', a special purpose vehicle or a guarantor. Determining whether a 'Seller-side' policy or a 'Buyer-side' policy is most appropriate for a particular transaction is ' a function of what the parties wish to achieve from the insurance (e.g., what is the 'driver' for the insurance?).
Tax Opinion Liability Insurance
Tax Opinion liability insurance helps a taxpayer reduce or eliminate a contingent tax exposure arising from the tax treatment of a transaction, investment or other activity where the underlying legal conclusions supporting that tax treatment may be subject to future challenge by the relevant tax authorities.
Tax Opinion liability insurance effectively provides certainty to taxpayers in particular areas where there is uncertainty in the application of the tax laws where, for example, the tax authorities will not issue advance rulings or where there is inadequate time for the taxpayer to obtain an advance ruling.
Typically Taxpayers find that Tax liability insurance may be an effective tool in the following areas:
- Successor liability issues in the context of M&A transactions where, due to joint and several liability issues, an acquirer is concerned about an historic tax position taken by the target company or its consolidated tax group;
- Protection of a group's tax position following reorganisations (for example, hive down, demerger or disposal);
- Tax consequences resulting from a change of ownership;
- Intra-group transfers/reorganizations; or
- Where parties do not wish to obtain prior clearance from the tax authorities.
Initial Public Offering (IPO) Insurance / Prospectus Liability Insurance
Initial Public Offering (IPO) Insurance otherwise known as Prospectus Liability Insurance allows cover for companies and their directors from the risks involved with capital raising. Initial Public Offering (IPO) Insurance / Prospectus Liability Insurance may be considered by any company involved in a public offering of securities or private placements by corporate organisations.
Initial Public Offering (IPO) Insurance / Prospectus Liability Insurance is a specialised stand-alone Prospectus Liability Insurance policy for Australian companies involved in a capital raising. Typically this type of policy allows the premium to be capitalised as part of the cost of the fundraising and also allows for the ring fencing of prospectus liability exposures to avoid the depletion or exhaustion of any indemnity limits available under any separate D&O Insurance policy held by the insured. Also, some Prospectus Liability insurance Policies also provides 'entity' cover for the Company and not just the directors and officers.
The parties that may be held liable for a defective capital raising document typically include:
- the company making the offer
- the directors of the company
- any proposed director named in the disclosure document
- the underwriter
- any person who has made or consented to a statement contained in the disclosure document (including a person who is knowingly involved in a contravention)
- Investors who suffer a loss as a result of relying on a defective disclosure document can sue these parties to recover their loss.
These parties may then be liable for significant damages awards, the claimants’ costs and their own defence costs. Defence costs are typically very high in the case of a securities claim, particularly when such claims are made in ‘class actions’.
A defective capital raising disclosure document can also lead to regulatory proceedings by the Australian Securities and Investment Commission.
Initial Public Offering (IPO) Insurance / Prospectus Liability Insurance is a single premium transaction specific policy which covers the Insureds for Loss they are legally liable to pay by reason of a Securities Claim made against them for a defective Disclosure Document.
Please click the links below to access any Platinum Management Liability Insurance product or service page:
Association & Not For Profit Organisations Liability Insurance
Defamation Insurance
Directors and Officers Liability Insurance
Employment Practices Liability Insurance
Information Communication & Technology Liability Insurance
Insurance Premium Funding
Legal Expenses Insurance
Management Liability Insurance
Medical Malpractice Liability Insurance
Professional Indemnity Insurance
Professional Indemnity and Broadform Liability Insurance