In assessing a firm’s unique risk profile prior to a merger or acquisition, the Hauser Insurance Group has a three-point due diligence process to analyze the firm’s overall risk exposure and craft a unique coverage solution.

In doing this due diligence, firms can take action on the most urgent risks that they face and have plans in place in the event that a devastating external or internal event occurs. Additionally, this risk assessment also creates a targeted solution that increases efficiency and reduces expenses before and after closing.

Insurance Assessment

The firm’s existing insurance coverage is examined to check for coverage gaps, unnecessary coverage, and which insurance contracts should remain the same or should have changes made. Peer group benchmarks are used to determine whether the deductibles, premiums, and coverage limits are in line with industry and firm size norms, or if the coverage is inadequate for the premiums paid.

If the firm has any programs in places such as disaster mitigation plans, cybersecurity measures, or workplace safety programs, their efficacy is also examined to determine if they are producing the results needed to truly mitigate the firm’s unique level of risk.

The insurance assessment also determines run-off liability costs through the course of the merger, as well as creating or revising property and casualty management liability programs that align with closing.

Transaction Assessment

Mergers are complex transactions that require the assessment of joint venture agreements as well as transactional and insurance obligations. In this stage, liability assumption is examined with purchase and sale agreements as well as current insurance and indemnity provisions in existing contracts.

For the lenders involved in the transaction, the Hauser Insurance Group also ensures that firms are compliant with each lender’s insurance requirements to expedite the closing process.

Financial Assessment

Once the lender’s terms have been satisfied, the total cost of risk (TCOR) must be evaluated pre and post-close. Any outstanding letters of credit or escrow that can be reduced or consolidated once the merger is complete, or new collateral pledged, is also accounted for.

The Hauser Group also reviews the financial ratings and solvency of insurance carriers involved in the transaction and will propose transactional insurance solutions after analyzing this information.

The due diligence process deployed by the risk experts at Hauser Insurance Group ensures that each firm has had its unique risk profile examined and potential cost savings were found while meeting regulatory compliance standards.