CFC launches new solution for 'uninsured' portfolio acquisitions

CFC Underwriting, a specialist insurance provider and Lloyd's managing general agent (MGA), has launched a new solution aimed to simplify and speed up the process for private equity firms and businesses pursuing a portfolio of add-on acquisitions for existing or newly acquired platform companies.

CFC has launched a transaction liability solution for portfolio acquisitions. The company said it found that smaller transactions, such as portfolio add-ons, were going uninsured and developed its portfolio solution to expand the market of insurable risks.

The new solution can be structured to work on small add-on acquisitions, with no minimum premium needing to be purchased and no minimum transaction size.

Angus Marshall, CFC’s transaction liability practice leader, said: “While the timing, size and investment strategy behind each portfolio varies, every business looking to purchase add-ons to their platform companies wants a streamlined, efficient process. Having to negotiate a new transaction liability policy for each acquisition adds unnecessary time not to mention cost. We’ve built a solution that gives buyers and sellers the certainty of recourse they require behind each transaction, but without the hassle.”

Grant Hollis, CFC’s transaction liability team leader who designed the solution, added: “Our solution can be structured in a number of ways but offers the potential for one limit, one premium, one fee and one aggregate retention across an entire portfolio of companies. It negates the need for individual policy negotiations delivering a massively more efficient process for smaller deals with the added benefit for the policyholder that additional acquisitions are covered by a partner who they already have a relationship with and trust.”