Corporations that grow by acquiring manufacturers or distributors need to include Policy Find's insurance archeology services in their mergers and acquisitions pro forma. Investigating the historic insurance programs of companies targeted for acquisition needs to be an essential aspect of due diligence. This is because corporations acquiring ownership of present day companies risk acquiring potential liabilities with roots in the past practices of the companies they acquire.

Corporations that acquire others may purchase liabilities in the form of long-tail environmental and toxic tort claims that surface years after mergers have been consummated. These corporations need to take the acquired company's insurance assets with them into such an uncertain future. Yet too often, the acquiring corporation settles for the targeted company's present insurance portfolio and allows the seller's historic insurance assets to be lost or destroyed.

Policy Find's Due Diligence Insurance Audit

Policy Find performs a full historical insurance audit as part of corporate mergers and acquisitions due diligence process. Specialized insurance research personnel retrieve and copy accounting, corporate history and sales records at the target company's facilities. Further, they review documents at off-site insurance archives to reassemble the target company's historic insurance program.

Once these documents are retrieved, they are examined to determine what coverage potential they may provide to protect the acquiring corporation from the pollution or toxic tort claims of the future. An assessment of what insurance assets the acquiring company takes with it from the target company is an important component of the acquisition process and can make or break a deal where future liabilities are almost certain to emerge.

Contact us to see how Policy Find can help protect your company during mergers and acquisitions...

A Very Valuable Service

Policy Find's decades of experience in locating and retrieving insurance policies pays dividends long after the search has ended. Having a bank of insurance policies to fall back on to weather the legal storms that the future may bring makes good business sense. The alternative can be devastating. Potential liabilities from acquiring companies with hidden liabilities can be devastating. A corporation that innocently acquires a distributor of non-toxic plumbing fixtures today may find that the acquired company formerly distributed asbestos products. This discovery may come in the form of a law suit brought by a plumber who traces his lung disease to exposure to these asbestos products over decades during his career. Another example could involve a medical supply company that made or distributed dust masks to foundry workers or miners, where personal injury claims have been filed by individuals affected with silicosis. The question will then be whether the acquiring company can access the resources to pay the attorneys to defend against the claim. The product liability insurance of the acquired company often has the potential to provide defense and indemnity in this situation.

Policy Find's ability to search for, locate and assemble the insurance documents required to protect the acquiring corporation from this long-tail liability is usually worth millions in defense and indemnity and yet is perhaps the least expensive part of the entire acquisitions process.