CFC launch addresses IP risks in M&A

CFC has launched coverage for IP infringement risks associated with acquisitions.

Transaction liability practice leader at CFC, Angus Marshall, says that while transaction liability insurance may afford a degree of IP protection, its extent is variable according to the scope of IP reps and warranties. For instance, the relevant IP reps and warranties may include qualifiers which typically relate to issues which occurred prior to acquiring the company and do not provide any protection future IP infringement allegations.

“Buyers frequently purchase transaction liability insurance to protect themselves against
financial loss resulting from breaches of the representations and warranties made by the seller regarding the company being acquired, including reps and warranties in relation to IP. While these policies afford some IP protection, the extent of this protection can vary depending on the scope of the IP reps and warranties," he explains.

“We believe this powerful combination can act as a deal facilitator, smoothing the negotiation of IP reps and warranties and providing peace of mind for both the acquisition and integration stages of a transaction."

Intellectual property underwriter, Kristian Kolsaker, added: “A robust standalone IP insurance policy will protect the target against IP infringement allegations including patent infringement. By adding CFC’s standalone IP cover to CFC’s reps and warranties insurance, clients can secure holistic IP coverage for both past and future IP risks via a single, streamlined underwriting process.”

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