Closing with Confidence: Why M&A Legal Teams Choose Matrix Insurance Due Diligence – Q1/25

In the high-stakes world of mergers and acquisitions (M&A), legal teams serve as the backbone of deal structuring, ensuring clients navigate complex transactions with confidence. Yet, one critical element often remains underexamined—insurance due diligence. Matrix Global’s Insurance Due Diligence (IDD) service equips M&A legal teams with the expertise to uncover hidden risks, enhance deal certainty, and secure optimal outcomes for their clients.

The Hidden Risks in M&A Transactions

Legal teams are tasked with assessing and mitigating potential risks, yet insurance—a key pillar of risk management—is frequently overlooked, assumed to be sufficient or diligenced by the incumbent insurance broker or an insurance broker looking to acquire the account. In reality, poorly structured or inadequate insurance coverage can expose acquirers to substantial post-transaction liabilities, financial pitfalls, and operational vulnerabilities.

How Matrix Strengthens Legal Teams in M&A

Matrix Global delivers an independent, expert-led approach to insurance due diligence, empowering legal teams to provide more comprehensive risk advisory services. Our offering includes:

Insurance Due Diligence: A deep-dive analysis of the target company’s existing insurance policies to identify gaps, exclusions, and deficiencies. Evaluation of whether the target’s insurance strategy aligns with the acquirer’s risk tolerance and long-term business objectives. Scrutiny of historical claims, pending litigation, and contingent liabilities that could impact the deal’s viability.

The Matrix IDD Process

We follow a structured six-step process to deliver the independent perspective M&A legal teams require:

Understand

• Gain insight into the target’s business model, risk profile, operations, and strategic insurance objectives.

Assess

• Evaluate key risk exposures, including operational, contractual, supply chain, environmental, and statutory risks.
• Assess the current insurance programme’s total cost of risk and effectiveness of risk management relationships.

Review

• Analyse the target’s existing insurance structure, including exclusions, warranties, and legacy cover.
• Examine historical loss trends and the impact of a change of control.

Map

• Benchmark the target’s insurance programme against industry standards and best-in-class coverage.
• Identify uninsured or under-insured risks.

Report

• Deliver an independent technical review, including:
• Adequacy of the current programme.
• Identification of additional insurance solutions.
• Recommendations for improvements and associated cost implications.
• Prioritised action plan for pre- and post-completion risk management.

Implement

• Provide follow-up support, including:
• Assistance with Warranty & Indemnity (W&I) placement.
• Key Person insurance strategies.
• Transition management for insurance programme adjustments.
• Broker selection and appointment guidance.

Matrix Global: An Independent Partner with No Conflicts of Interest

Unlike traditional insurance brokers, Matrix Global operates as an independent advisory firm, ensuring complete objectivity in our analysis and recommendations. We do not sell insurance products, meaning our sole focus is on delivering unbiased, expert-driven insights that serve the best interests of legal teams and their clients. This independence allows us to assess insurance structures with absolute transparency, ensuring that M&A transactions are protected by the most effective and commercially viable solutions available.

Why Legal Teams Choose Matrix Global

M&A legal teams rely on Matrix for three key advantages:

Independent Risk Identification & Mitigation: Our independent insurance due diligence service proactively uncovers exposures that could threaten deal success or result in unforeseen financial burdens.

Expert-Led Efficiency: Our independent, specialized expertise streamlines the due diligence process, equipping legal teams with actionable insights that add value to their advisory services.

Increased deal certainty: With a clear understanding of insurance-related risks, legal teams can drive stronger negotiations and prevent costly surprises.

Closing with Confidence

By integrating Matrix Global’s Insurance Due Diligence into M&A transactions, legal teams can provide clients with a robust, 360-degree risk management strategy. Identifying and mitigating insurance-related exposures and enhancing deal value, ensures compliance, and delivers the confidence clients need to execute acquisitions with precision. For more information on how Matrix Global can support you, Contact Us.

Matrix are authorised and regulated by the Financial Conduct Authority.

” Our independent, specialized expertise streamlines the due diligence process, equipping legal teams with actionable insights that add value to their advisory services. “

Contact Alison Roome, Managing Director M&A

E: aroome@matrixglobal.co.uk
T: +44 (0)203 457 0916
M: +44 (0)7506 247629