Mergers and Acquisitions

A highly specialised field of cover that facilitates the smooth running of the M&A process. It does so by transferring certain potential risks of the transaction (whether already foreseen or which may surface at a later date) to an insurance policy.



What are Mergers and Acquisitions?

Mergers and acquisitions (M&A) is a corporate strategy dealing with the buying, selling and combining of different companies with the intent of improving financial performance without the having to create and develop a new entity from the ground up.

What are the potential benefits?

The reasons behind the activity may vary widely and common rationales include seeking economies of scale and distribution, creating cross-selling opportunities, purchasing market share, exploiting shared synergies and more effective tax effectiveness.

Seeking the best result for both buyers and sellers

Mergers and acquisitions deals are usually considered successful when both the buyer and the seller (or companies merging) emerge from the negotiations having fully taken into account the price paid, created value for their shareholders, the realisable benefits and aware of the potential risks.

How can insurance assist?

Mergers and acquisitions insurance is a highly specialised field of cover that specialises in smoothing and facilitating the M&A process. It does this by transferring to an insurance policy certain potential risks to the transaction that are already foreseen, or might surface at a later date.


Who is it for?

Any company considering a merger, acquisition or restructure might consider specialist Mergers and Acquisition covers.


What is covered?

AIG’s highly specialised M&A insurance products are underwritten by an international team of skilled insurance and M&A professionals who integrate closely with negotiating parties and their advisers to create tailored solutions that can facilitate commercial objectives whilst minimising deal risk.


Types of coverage

Tax Liability insurance 

Tax Liability insurance can reduce or eliminate a loss arising from a challenge by the tax authorities of a taxpayer’s tax treatment of a transaction or investment. A taxpayer may have to proceed with
a transaction or investment where there was uncertainty in the application of tax laws, or did not have enough time to obtain a tax ruling in advance.

Litigation Buyout insurance 

Litigation Buyout insurance ring-fences contingent liabilities and legacy management issues in a company that needs to be transferred in case of
an acquisition.

Warranties and Indemnities insurance

Warranties and Indemnities insurance covers breaches in representations and warranties given as part of the sale of a business. Sellers can cover themselves to prevent sale proceeds being tied up in escrow accounts. Buyers can ensure the warranties have real value, even if the seller is unable to pay a warranty claim which arises some time in the future.

Important Information  

This site only contains an overview of the most important coverages and exclusions. Only the general and specific conditions (“Insurance Policy”) provide an accurate, binding, description of the covers and exclusions. It is necessary to fully analyse the Insurance Policy, as well as all other relevant documents with contractual and pre-contractual information before any decision to buy, underwrite, adhere to, accept, sign or conclude an insurance agreement.

Important information

Here you will find information about how to request a quote with detail of premium calculation, the general and specific conditions, and/or other relevant documents with contractual or pre-contractual information, the duration of the insurance policy, the applicable law and jurisdiction, how to file a complaint or reach the ombudsman, etc.