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News October 14, 2020

New solution from CFC addresses IP risks in M&A transactions

CFC has launched a new solution aimed to address intellectual property (IP) infringement risks facing buyers undertaking a merger or acquisition.

Leveraging the expertise of its dedicated IP insurance product along with its leading mid-market M&A insurance products, CFC’s solution offers protection to buyers for IP infringement risks associated with their merger or acquisition.

Buyers frequently purchase transaction liability insurance to protect themselves against financial loss resulting from breaches of the representations and warranties (reps 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. Angus Marshall, Transaction Liability Practice Leader, CFC

As an example, 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.

Kristian Kolsaker, Intellectual Property Underwriter at CFC, adds: “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.” 

Marshall goes on to say: “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.”

CFC has one of the largest dedicated IP insurance underwriting teams in London, made up of expert IP underwriters and backed by a panel of specialist claims adjusters and risk management partners. CFC has also grown to become the largest lower mid-market M&A insurer in North America (by policy count) and one of the largest M&A insurers globally with an underwriting team made up of experienced M&A attorneys, investment bankers and chartered accountants.