An engineering business acquisition can also mean acquiring exposure connected with the previous work of the acquired practice.
Before completing an acquisition, it is worth understanding:
- what engineering disciplines the business has undertaken
- historical project values
- previous claims and circumstances
- retroactive dates
- previous insurers
- overseas activities
- subcontracted professional services
- major outstanding projects
- any discontinued activities
The insurance position can depend heavily on how the acquisition is structured.
For example, purchasing the shares in an existing company may create a different exposure from purchasing selected assets, clients or projects.
The acquiring firm’s insurer should understand whether it is expected to cover historical work performed by the acquired business.
Where that prior work is not being assumed by the new policy, separate run-off arrangements may need to be considered.
