Buying a business or Merging companies

commercial business insuranceI’m working on a couple of cases at the moment where one business is buying another or merging with another.

Buying or merging with a business will require a thorough review of any Business Insurance that might be in place.

Many businesses buy a company out or merge with another business when the existing insurance policy is part way through its annual term, and assume that it will continue to protect them.

This however is not the case, as a change such as an acquisition or merger will mean a significant change to the risk being presented to insurers.

For example, the change could mean new Directors, or some departing. A new entity might be formed, or the new business might now have a different offering or trade.

Things to consider when you are buying a business or merging companies


Who will be the Directors/principals? – are these likely to change and if so, what is the background of any new Directors/Principals?

Will a new company be formed? – if so, your insurers will want to know and you may need to make provision in your insurance programme for the soon-to-be closed company.

Will your product/service change? – if the change to the business includes new/different products and services, this will have an impact on your insurances, as they will have been placed based on the activities of the previous/current business.

Will the change mean more or less assets, turnover and wages? – if so you may need to review the sums insured and wages/turnover estimates on your policy moving forwards

All of these things, and many others, are important to the insurers, who nine times out of ten will want to cancel the existing insurance and set up a new policy based on the new circumstances.

Insurance Brokers EssexIf you are buying a business, merging with another, or simply changing your business in some way, contact us for a no obligation review of your Business Insurance.


Evans Insurance Brokers – Independent Insurance Brokers in Essex