know what you’re buying.

Insurance due diligence reviews the target’s own policies, claims and costs so you know what you’re buying. R&W insurance is a separate policy that pays you if the seller’s statements in the purchase agreement turn out to be wrong. Diligence usually comes first, and underwriters typically want to see it.

Usually by reviewing the add-on’s program during diligence, then folding it into the platform’s policies at or soon after closing. That can lower cost and close gaps, but watch for claims-made policies that need a tail and for contracts that require specific limits or wording.

Usually the seller, since the tail covers claims about management’s actions before the sale, but it’s negotiated in the purchase agreement. Its cost is usually priced off the company’s current D&O premium and the length of the tail, and it’s typically bought at closing.

It depends on the loan agreement, but lenders commonly require property and liability coverage that names the lender as loss payee or additional insured, and sometimes key person life insurance. Certificates proving it are usually needed on closing day, so review the requirements early.

Findings usually land in one of three places: the model, as a higher or lower go-forward premium; the price, through an EBITDA adjustment at your multiple; or the purchase agreement, through escrows, indemnities or seller-paid costs like a D&O tail. Findings that surface late are harder to negotiate.

Big findings, like an expensive D&O tail or a missing coverage line, are easier to address in the LOI or early drafts, when price and terms are still open. Smaller items usually go in the purchase agreement as seller covenants, closing conditions or indemnities. Raising findings late gives you less room to negotiate.

Usually, yes. The fund and its management company face claims that portfolio company policies may not cover, such as investor disputes or claims tied to board seats. Firms commonly buy general partner liability, which combines D&O and E&O for the firm, often with cover for partners serving on portfolio boards.

Yes. Plenty of deals don’t close, and that’s fine. The review comes with no obligation to place a policy, and it starts under NDA. Knowing the insurance picture early can help you decide whether to keep going and what to ask the seller.

Reviews policies and claims before signing, prices how the add-on fits the platform, flags tails, and compares deal protection, then updates platform policies, named insureds, and lender certificates at close. Afterward the add-on moves onto one renewal calendar.

Usually not. A buy-side policy is written for one transaction, so each add-on generally needs its own policy, a seller-side transaction liability policy, a portfolio arrangement, or seller indemnity. Terms depend on underwriting and policy forms.

Often at close for lines that are easy to extend, and at the next renewal for others. It depends on claims history, contracts, and how much term is left on the current policies. Riza is a licensed insurance agency and reviews this deal by deal.