Design Firm M&A Checklist

Design Firm M&A Checklist

1. Review Existing Policies:

   - Obtain copies of all existing insurance policies from both firms.

   - Evaluate the coverage limits, terms, and exclusions of each policy.


2. Due Diligence:

   - Identify all ongoing and potential claims, lawsuits, or liabilities.

   - Analyze historical insurance claims and loss data.


3. Coverage Continuation:

   - Determine if existing policies can be extended to cover the merged entity temporarily.

   - Verify if the new entity qualifies for any coverage extensions provided by existing policies.


4. New Insurance Needs:

   - Assess the merged entity's insurance requirements based on its expanded size and operations.

   - Consider Professional Liability, General Liability, Property Insurance, Workers' Compensation, and Cyber Liability, among others.


5. Consolidation of Policies:

   - Decide whether to combine policies from both firms into a single package policy or keep them separate.


6. Coverage Gaps:

   - Identify potential gaps in coverage that may arise due to policy differences or exclusions.


7. Renegotiation with Insurers:

   - Negotiate with insurers to amend or renew policies to reflect the merged entity's needs.


8. Notification Requirements:

   - Determine if existing policies require notifying insurers of the merger or acquisition.


9. Contractual Obligations:

   - Review contracts, including client agreements, to ensure insurance requirements are met.


10. Run-off Coverage:

    - Evaluate the need for "run-off" coverage for the acquired firm to cover past work and potential claims.


11. Employee Benefits:

    - Address health, life, and disability insurance coverage for employees of both firms.


12. Employee Practices Liability:

    - Assess the need for coverage related to employee-related claims, such as wrongful termination or discrimination.


13. Integration Plan:

    - Develop a plan for integrating insurance policies and risk management practices post-merger.


14. Risk Management Strategy:

    - Establish a comprehensive risk management strategy for the newly merged entity.


15. Legal and Regulatory Compliance:

    - Ensure that the new entity complies with all legal and regulatory insurance requirements.


16. Communication:

    - Communicate changes in insurance coverage and policies to all relevant stakeholders.


17. Engage Professionals:

    - Consider involving legal and insurance experts to navigate complex insurance issues during the merger.


18. Review Periodically:

    - Regularly review and update the insurance coverage as the merged entity evolves.


Remember, this checklist is not exhaustive and should be tailored to the specific circumstances of the merger and the insurance landscape in your jurisdiction. It's recommended to consult with legal and insurance professionals to ensure a smooth and compliant transition.

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