FOR IMMIDIATE RELEASE 6/23/16 – ENVIRONMENTAL RISK MANAGERS, INC. (ERMI) INTRODUCES MAPP PRODUCT TO ADDRESS TRANSACTIONAL RISKS
Environmental Risk Managers, Inc. has announced a new product to address exposures related to business & property transactions. The Mergers, Acquisitions, and Pollution Protection (MAPP) product combines Representations & Warranties (R&W) Insurance with Pollution Liability Insurance.
For those not familiar with R&W insurance, it’s designed to provide coverage for the breach of a representation or a warranty contained in a Buy / Sell Agreement, in addition to, or as a replacement for all or most of the seller’s contractual representations and warranties.
Brooks Bunbury, Vice President of ERMI, sees a growing need for a combined product to address the environmental and transactional exposures created via indemnifications in standard buy/sell agreements. “Over the last decade we have seen a steady increase in the number of M&A deals (Mergers & Acquisitions) which require Pollution Liability Insurance for deals to close. Over this same time, we have seen a growing interest in incorporating R&W Insurance into M&A transactions as well. As a general rule, R&W policies typically exclude coverage for pollution.” Mr. Bunbury went on to explain, “At the end of the day, all sides of the deal want a clean transaction. By offering R&W, Tax Liability, and Pollution Liability Insurance individually, or combined in a package, our new MAPP product does just that. It allows all parties to go their separate ways while reducing the risk of un-forecasted liabilities arising from the transaction”
Insurance industry data has revealed that one out of every four M&A deals has at least one claim of a breach of the reps and warranties after closing. “As we have seen from environmental indemnifications in transactional documents, if there’s not a pre-determined financial assurance mechanism in place, the environmental indemnification that the seller agrees to may not be worth the paper it’s written on.”
“In the past, the response to an issue after closing has been to negotiate around the problem. Unfortunately, negotiating is expensive, time consuming and rarely brings about the most desirable outcome for all involved parties. MAPP addresses the unknowns by providing financial assurance should a problem arise after closing, therefore creating a cleaner transaction with less risk. With MAPP, ERMI has raised the bar on financial assurance for M&A deals.”
Environmental Risk Managers, based in Leland, Michigan was founded in 1992 as a specialty Environmental Liability Insurance wholesaler. With an emphasis on education, ERMI combines their product knowledge with superior marketing to provide the highest level of service in the industry.
“We’re excited to leverage our proven strategies in the Pollution Liability Insurance market to support companies with their transactional insurance needs.”
For more information, please contact Brooks Bunbury with Environmental Risk Managers.