Insurance due diligence is a critical component of any M&A transaction. As a corporate asset on the balance sheet, insurance warrants as much attention and review as any other company asset in connection with a merger, acquisition, or investment. If the limits of liability, terms and conditions, quality, or types of insurance are inadequate, the asset may be impaired, and risks assumed by the buyer are increased or un/underinsured.

Insurance due diligence involves reviewing and assessing the target company’s insurance programs, risk exposures, and potential liabilities, including identifying insurance risks that could derail a deal. This makes it a vital aspect of any corporate transaction. The detailed analysis and recommendations provided through the insurance due diligence process deliver valuable input into the financial modeling process of a transaction.

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