CFC has enhanced its transaction liability suite by simplifying and speeding up the process for private equity firms and businesses pursuing a portfolio of add-on acquisitions for existing or newly acquired platform companies.
The insurer's transaction liability leader, Angus Marshall says having to negotiate a new transaction liability policy for each acquisition adds unnecessary time and cost. "We’ve built a solution that gives buyers and sellers the certainty of recourse they require behind each transaction, but without the hassle."
CFC identified that smaller transactions, such as portfolio add-ons, were going uninsured and developed its portfolio solution to expand the market of insurable risks. This new solution can be structured in a number of ways but offers the potential for one limit, one premium, one fee and one aggregate retention across an entire portfolio of companies.
CFC’s solution is to agree a master policy wording at the time of the primary platform acquisition and add on endorsement once each subsequent acquisition is completed.
It says an aggregate policy limit can be agreed upfront based on the anticipated combined enterprise value of the portfolio, or individual policy limits can be agreed for each deal in the event that add-on acquisitions have not yet been identified.
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