Cyber security, transactional risks and multinational expansions are the three of the biggest exposures associated with global M&A transactions, according to a new whitepaper from Chubb.
Related: AGCS says business interruption, cyber incidents are top business risks for 2018
The paper—titled “Emerging Risk Considerations in Global M&A Transactions”—outlines ways to deal with each of the threats and how to prevent them from happening in the first place.
- Cyber security: The report identifies 2016 as the worst year on record for cyberattacks, with nearly half of the attacks coming from ransomware. Cyber coverage and loss mitigation services can help protect clients from these risks.
- Transactional risks: Any M&A deals that involve representations and warranties are at risk of certain breaches. A representations and warranties insurance policy protects against these risks, and can also streamline the negotiation processes.
- Multinational expansion risks: Any company that works across international boundaries can encounter a number of threats. M&A deals can face multiple regulatory, legal and compliance issues. Controlled master policies can be used as a risk transfer strategy to help reduce exposures.
“While one size does not fit all, the use of a specialized risk transfer mechanism to deal with these and other risks is essential to ensuring transactions proceed with greater clarity and confidence,” Seth Gillston, Chubb’s M&A and private equity practice leader, said in a news release.
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This story was originally published by Canadian Insurance Top Broker.