Sterling Risk Advisors
Mergers and Acquisitions Insurance Due Diligence - Sterling Risk Advisors - Insurance Brokerage, Risk Management

Mergers and Acquisitions Insurance Due Diligence

Sterling Risk Advisors provides a full suite of risk and insurance services designed to complement financial, legal, and operational due diligence. Private equity firms, merger & acquisition (M&A) attorneys, mezzanine lenders, investment banks and capital providers have come to rely on the disciplined and experienced approach that only Sterling’s M&A Team can provide.

Property & Casualty

  • Analyze the scope of existing exposure and current insurance needs of the target company
  • Quantify and assess the risk management program (benchmark against similar companies, review carrier strength, project future implications relating to findings)
  • Create pro-forma insurance expense projections to formalize total cost of risk report
  • Identify hidden exposures that may change due to the transaction (environmental, directors’ & officers’ run-off, change in control
  • provisions, etc.)Identify contractual liabilities pertaining to insurance
  • Identify if a transactional risk transfer vehicle is applicable (representations and warranties insurance, loss mitigation insurance, contingent liabilities, etc.)
  • Evaluate target company’s historical losses to ensure no inheritance of potential litigation
  • Provide formal report of due diligence findings that may impact pricing or exposure. Work with other members of the deal team to incorporate these into negotiations and/or deal documents.

Employee Benefits

  • Determine value of total benefit package per employee (medical, dental, vision, life insurance, etc.)
  • Evaluate current plan design (opportunities to contain costs, limit expenses?)
  • Identify components of ERISA compliance for potential exposure
  • Identify Affordable Care Act compliance (safe harboring plan from an affordability standpoint, current plan satisfying minimum essential coverage, avoid inheriting future penalties)
  • Analyze potential for DOL and IRS Audits
  • Analyze historical claims data to project a post-close cost of benefit plan
  • Identify potential negligence or noncompliance of FMLA, HIPAA, ADA, COBRA to avoid fines and penalties subsequent to transaction
back to top