In an article for Bloomberg Law, Partner Zachary Jacobs discusses how M&A diligence informs deal execution and post-close success while using insurance as a case study.
Read an excerpt below.
As parties explore a potential business combination, the acquiror typically conducts a due diligence investigation of the target to uncover legal risks, financial irregularities, or operational deficiencies. But diligence today is about more than flagging risks—it's also about shaping value and preparing for successful integration.
Insurance due diligence offers more than a check-the-box review of policies. It reveals how companies manage risk, allocate capital, and prepare for uncertainty. Detailed insurance analyses and recommendations developed during due diligence can also play a critical role in shaping the buyer's financial model and informing purchase price negotiations. Failure to secure sufficient coverage or to account properly for losses within large-deductible programs can materially impact a company's total cost of risk and, ultimately, enterprise value.
Using insurance as a case study, this overview illustrates how M&A diligence directly informs both deal execution and post-close success.
Insurance diligence, in particular, helps assess the target's risk profile and anticipate integration challenges—making it an essential tool for navigating complexity and avoiding costly surprises.
Overview of Insurance Due Diligence
The scope of M&A due diligence has expanded significantly over the past two decades. Historically, acquirors focused primarily on scrutinizing contracts, financial statements, and litigation history—often while treating insurance review as perfunctory.
Today, best practices take a more holistic approach. Risk, culture, technology, human capital, environmental exposure, data protection, and cyber infrastructure all influence deal value and success. Once an afterthought, insurance is now recognized as a critical asset class in its own right.
Read the full Bloomberg Law article here.
