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Representations & Warranties Insurance
Example Stock Purchase Agreement
Navigating Corporate Transaction Insurance
In the world of corporate transactions, risk mitigation and deal facilitation are paramount. One indispensable tool used by both buyers and sellers is Corporate Transaction Insurance (“CTI”). This article and the accompanying presentation by the authors aim to demystify CTI, shedding light on its various forms and highlighting its impact on M&A deals. Especially in the last two decades, CTI has emerged as an alternative to the tools used to secure indemnification obligations in corporate transactions, enabling buyers and sellers to pursue their objectives with greater confidence. For sellers, CTI is a potent tool to attract competitive offers, assuage post-closing anxieties, and reduce clawback risks. Buyers, on the other hand, can use CTI to bolster their bids, safeguard relationships, and secure remedies for unforeseen issues. For both parties, CTI is often used to facilitate successful negotiations and eliminate potential obstacles to closing a transaction, such as protecting against unanticipated and unknown breaches of representations and warranties.The topics covered in this article consist of a primer on the most commonly used CTI, Representations and Warranties Insurance, followed by a brief discussion of other crucial and emerging forms of CTI. Contingent Risk Insurance, Tax Insurance, Environmental Insurance, and Litigation Insurance each play a pivotal role in addressing known risks, ensuring the smooth flow of corporate transactions, and mitigating potential roadblocks that may get in the way of closing a transaction. Each of these types of CTI could be the subject of a longer, more in-depth presentation.We hope this article and our presentation serve as a valuable introduction to this topic, and we have made an effort to incorporate footnotes that refer readers to more comprehensive materials should they wish to explore the subject of CTI in greater depth.
Insurance Strategies
Insurance strategies with respect to mergers & acquisitions and contracts (specifically for additional insureds and indemnity provisions). PowerPoint slides.
Insurance 101
Every provision of a lease or contract is either (a) restating the rule that would be supplied by the court in the absence of the provision (the “common law”) or is supplied by statute or (b) is expressly shifting a risk from one party (the “protected party”) to the other (the “protecting party”), to the extent permitted by common law and statute. The most common method of risk management are through contractual provisions for (1) indemnity, (2) insurance and (3) waiver of subrogation (aka the “three legged stool”). Neglecting any one of these three risk management legs may result in a failed risk management program.
Insurance 201
Risk allocation provisions are contained in all contracts. They are used in an attempt to assure the intended economic objectives of the “deal.” The success of an entity’s approach to contractual risk transfer can be considered successful if it meets the following criteria: Risks retained are appropriate and affordable; Risk as an element of the overall transaction and negotiation is incorporated at the onset; Indemnity, insurance, and other pertinent conditions are not so onerous that contact negotiations drag on unnecessarily delaying the transaction or necessitating the use of second-rate service providers to accomplish the contract’s purpose; Contractual conditions allocating risk are not so onerous that a court disallows their operation at a future point in time; Insurance requirements are clear, using recognized terms that can be interpreted both at the time the contract is negotiated and in possible future disputes; Insurance and other support for the indemnity is in place when a loss occurs; A thorough insurance monitoring process keeps the transferee in compliance with the insurance requirements; and/or The performance of the contract is monitored and regularly evaluated. Every provision of a lease or contract is either (a) restating the rule that would be supplied by the court in the absence of the provision (the “common law”) or is supplied by statute or (b) is expressly shifting a risk from one party (the “party to be protected”) to the other (the “protecting party”), to the extent permitted by common law and statute. The most common method of risk management are through contractual provisions for (1) indemnity, (2) insurance and (3) waiver of subrogation (aka the “three legged stool”). Neglecting any one of these three risk management legs may result in a failed risk management program.
Cyber Liability Insurance Counseling and Breach Response
Cybersecurity is an issue that evokes equal parts of fear and confusion for business leaders. Anyone who has been involved in a real data breach will easily understand why an effective graphical analogy for describing such an event is to imagine being in a building that is on fire. There is panic, there is fear, there is chaos, there is confusion. It is a crisis situation. This paper covers: 1) government notification of breach; 2) understanding basic "data breach" foundations; and 3) reporting criminal activity to law enforcement. It also contains a number of checklists.
Cybersecurity for Your Law Firm: Data Security and Data Encryption
Protecting client data requires taking the same precautions that are taken for protecting any other kind of data. Whether the attackers are after employee social security numbers, customer payment card data, embarrassing emails from the CEO, the company’s crown jewel trade secrets, or highly sensitive client data, the central objective is to prevent the attackers from being able to access it. Attackers that are going to try and access this data are going to do so by trying to attack the law firm itself. If they are unsuccessful at attacking the law firm directly, they will likely try gaining access through a third-party by first attacking a third-party with whom the law firm does business and then using that access point to pivot inside the law firm. Accordingly, if you want to protect your law firm’s client data from cyber attackers, you must first ensure that your law firm is adequately protected. Second, you must ensure that those third-parties with whom your law firm does business are adequately protected. If the goal is to improve law firms’ cybersecurity defenses effectively, it must begin with the basics which will be the focus of this guide.
Think Insurance: Practical Tips for Maximizing Traditional Liability and Property Insurance Claims
Every year, American businesses invest millions of dollars in premiums to buy insurance coverage. There are as many different kinds of insurance products as there are risks. For the sake of simplicity, most insurance benefits can broadly be classified as either “first party” insurance or “third party” insurance. “First party” insurance generally refers to policies or payments that directly benefit the insured. Health insurance or property insurance benefits, for example, are paid to the insured or for services or to replace assets and income that directly benefit the policyholder. “Third party” insurance refers broadly to policies or payments that benefit third parties, liability insurance being the most common example. In the current economic environment, companies of all shapes and sizes are looking for ways to maximize value and reduce costs. When it comes to insurance, corporate policyholders may attempt to reduce costs by buying less coverage or agreeing to more restrictive terms. Alternatively, when contractual obligations and prudent risk management practices do not permit this kind of cost cutting, sophisticated risk managers and in-house counsel will seek to add value by increasing recoveries on claims under existing policies. Whether pursuing coverage for a first-party loss resulting from a hurricane or attempting to recover defense costs under a liability policy, there are fundamental best practices with which all insureds should be familiar. Understanding these basic concepts outlined in this article will provide the best opportunity to maximize claim recovery and to realize the greatest return on the investment corporate policyholders make annually in traditional liability and commercial property insurance policies.
How to Successfully Submit a Claim Under a Liability Insurance Policy
The successful submission of an insurance claim depends on a policyholder’s compliance with the conditions in the insurance policy. Insurance policy conditions typically require that the insured (1) provide notice of the claim or suit to the insurer, (2) forward copies of demands or legal papers received in connection with a claim or suit to the insurer, (3) cooperate with the insurer in the investigation, defense and settlement of the claim or suit against the insured, and (4) not make any payment, assume any obligation or incur any expense without the insurer’s consent.
Hacking Through a Cyber-Liability Claim and Related Insurance Issues
This paper and corresponding presentation identify the most common cyber risks, which types of policies are implicated by the risks, and how courts across the country are interpreting the relevant policy language in light of these developing legal issues.
What Every Young and Growing Business Needs to Know About Insurance
Starting and growing a new business necessarily means taking on risk. But that risk can be significantly reduced through purchasing—and taking advantage of—the proper insurance. Each business presents a unique set of exposures and financial circumstances. For instance, young businesses have different needs than established ones, and requirements vary significantly from industry to industry. Moreover, even the same company can have vastly different needs as time goes, necessitating risk management plans that can adapt as the business grows and changes. While the specific coverages and limits that a business needs will vary, though, one critical thing remains the same: Policyholders must have a working knowledge of their rights and responsibilities. If they fail to understand what coverage they have purchased—and the conditions required to actually obtain coverage—a valuable investment is lost.
"Top Ten" Insurance Issues for the Business Lawyer: A Guide for hte Non-Insurance Practitioner
At least one member of the Texas Supreme Court has characterized the high-stakes insurance issues coming before the Court as “fiendishly difficult”. Mid-Continent Ins. Co. v. Liberty Mut. Ins. Co., 236 S.W.3d 765, 777 (Tex. 2007) (Willet, J., concurrence). This paper attempts to identify and provide a practical guide to some of the more “fiendish” insurance issues that the non-coverage lawyer should appreciate. The business lawyer who understands the unique problems and issues concerning insurance is often in a better position to recognize and take opportunities to advance or protect the interests of his client.
The Lawsuit Has Landed
Representation of small businesses is the bread and butter of most law firms. Therefore, understanding the client’s business, their tolerance to the risks of litigation, and the client’s ability to handle the substantial cost of litigation are essential to maintaining a healthy and ongoing relationship with your client. Balancing the cost of litigation with the actual amount in controversy is often the most difficult issue presented to your client. In a number of instances, there is insurance coverage, which will alleviate some of your client’s worries with respect to the cost of defense and/or indemnification for liability. Consequently, when a lawsuit is filed against your client, one of the first questions is to inquire whether the client has a liability insurance policy that might cover this claim. If so, you should advise the client that it should notify the carrier of the suit and request a defense. The notice requirement is critical and puts the carrier on notice that a suit has been filed and it has a duty to possibly defend under the applicable insurance policy. The first part of this article will deal with your client’s duty to notify the insurer, the insurer’s duty to settle within the policy limits, and other issues related thereto.
Article: Cryptocurrencies - To insure or not to insure?
Article discussing insuring cryptocurrency and EU's new 5AMLD to bring cryptocurrency under traditional AML requirements.