M&A Coverage Reviews
Know what’s in place. Know what’s not. Adapt as needed.
Coverage gaps often surface late in the due diligence process and can affect terms. Get ahead of these with Canary’s third-party coverage review, providing buyers and sellers an independent read on the insurance picture before it impacts the deal.
Benefits of a third-party coverage review.
For Sellers
A lot goes into prepping a business for sale, particularly to the right buyer. Reviewing your current coverage and understanding what items trigger coverage to apply before or after a sale is vital. Waiting until the sale is about to close or until after the sale is completed to make policy changes can cost you. A coverage review will outline potential gaps in coverage, important timelines, recommended policy changes and tail coverage options.
For Buyers
Due Diligence often overlooks or overgeneralizes the insurance expectations needed from the Seller at closing. A third-party review of the coverages in force and how they do or don’t apply before and after closing is imperative. Enter a deal with more confidence, knowing that the appropriate coverages and tail coverage are in place. If items are missing, have the Seller address those issues before the closing is completed; before it’s too late.
How the review works
Scope
A short conversation defines what's in scope: which entity, which policies, which timeline. Pricing is determined once the full scope is set.
Review
Canary reviews the Buyer's expectations against the Sellers current policy, outlining what is or isn't met and provides a written list of policy change recommendations.
Adapt
If policy changes and tail coverage are needed, Canary can assist with these for current insurance clients. For insurance placements not currently made through Canary, a Broker of Record Letter may be needed to move forward.
Scope and pricing.
Starts at
$750
Final price is scoped per engagement: number of policies, size of the operation, and timeline against the deal calendar. Single-policy reviews price near the floor; multi-policy or compressed-timeline reviews scale from there. Call for details.
The coverage review includes a written deliverable. It is not legal advice and it is not a placement of coverage. Recommendations are provided for your consideration; keeping placement or coverage decisions between you and your broker and legal opinions with your legal counsel.
Questions we get asked
Do I need tail coverage when I sell my agency?
This is an important decision that should be made well before the deal is finalized. Waiting until the deal is almost done or actually completed can greatly limit your options. If your coverage ends at a sale, claims about work you already did may have nowhere to go, and the buyer's policy generally won't cover work that predates the purchase date. Tail coverage, also called an extended reporting period, extends the window to report those claims. The options and election deadlines depend on your specific policy, so it's a question for whoever placed the coverage before the deal is done.
Should insurance coverage be reviewed prior to an acquisition?
Yes. Canary provides independent coverage reviews for both buyers and sellers of agencies and professional firms on a case-by-case basis. For a buyer, that means reading and reviewing the seller's policies, exclusions, and retroactive dates against the business you'll be running after closing. For a seller, it usually starts similarly, with a review of your policies and coverage requirements against your current business. Seller reviews often end with the purchase of tail coverage. A review isn't legal advice or a placement of coverage: the findings go back to your deal team so gaps can be addressed before close.