According to a new Deloitte report, M&A activity is expected to dramatically increase in 2019. And it’s probably safe to say that during the frenzy of activity leading up to completion of the deal, ensuring compliance with cyber insurance policies may not be top of mind. But to maximize coverage following the completion of the transaction, entities are strongly encouraged to take a close look at their cyber policy provisions early in the deal-making process so that they can satisfy any applicable notice and underwriting requirements. In addition, cyber insurance purchasers that are contemplating M&A activity should carefully consider such policy provisions prior to purchasing a cyber form.
Cyber crimes and mishaps continue to plague businesses both domestically and abroad. According to recent FBI statistics, worldwide losses associated with Business Email Compromise (BEC) schemes alone have skyrocketed to over $12 billion. Whether a company’s computer network has been compromised, its business operations interrupted, or its employee duped into wiring funds to a criminal’s bank account, the financial consequences of a cyber event can be devastating.
Record numbers of M&A transactions were announced in 2017, and that number is expectedto increase in 2018. That doesn’t mean, however,that every announced deal is completed, that theprocess is always smooth, or that buyers’expectations were always met. The uncertainty that often abounds in the M&A context,concerning everything from the seller’s corporategovernance to its cyber security posture, can create obstacles that can impede and even derail a transaction.
To facilitate the process of getting to “yes,” moreand more companies are turning to Representations and Warranties (R&W) insurance. R&W insurance can be a key transaction facilitator, which protects a party in the event of post-sale discovery of incorrect representations and warranties in a sales contract.
Originally published on PropertyCasualty360
At long last, the GDPR effective date is just around the corner. As companies continue to work towards compliance, many are realizing that despite their best efforts, the odds of achieving and perpetually remaining in 100% compliance are slim to none.
As with any massive compliance undertaking, mistakes and missteps related to GDPR requirements are inevitable, especially in a world where data volumes, connectivity, mobility, and risks continue to increase. Given this reality, companies should consider transfer of GDPR-associated risks through insurance.
It’s critical to note that finding the most comprehensive coverage for GDPR exposures requires careful analysis of available insurance policy options. That analysis should include a thorough review of the various mandates contained in the GDPR, as well as the company’s practices around protected data, its current insurance policy(ies), and the law governing interpretation of those policies. Importantly, even companies that currently have cyber insurance in place may not have optimal coverage for the wide variety of exposures under the GDPR.
Following an active 2017, merger and acquisition activity shows no signs of letting up this year. In fact, a recent survey by Deloitte found that corporate executives and private equity investors expect strong deal activity throughout 2018, with technology acquisition as a primary deal driver. The survey results point to both increased deal flow and size. Bullish dealmaker sentiments are expected to drive M&A activity across industries and regions. The long-term success of these deals will depend on a variety of factors, including the quality of the due diligence performed in connection with the transactions.
As companies recognize that cyber risk cannot be eliminated, only managed, they are increasingly looking to transfer residual cyber risks through insurance. Still, many small and midsize businesses and law firms are going without cyber coverage, perhaps because of confusion about how to get the right policy. Despite the undeniable challenges presented by today’s cyber insurance market, businesses of all sizes can cut through the confusion and obtain the right cyber insurance for their enterprise by following this five step process: