A government backed insurance scheme can get Britain’s live music and events industry back to work when it is safe to do so Jools Holland,…
Confidential Key Person Protection for M&A
Companies invest considerable amounts of money working on acquisitions (or disposals) and often there are key individuals involved. Should anything happen to those key people the deal may be called off, leaving deal makers with considerable irrecoverable costs. Confidential Key Person Insurance mitigates that potential financial exposure.
Confidential Key Person Insurance, originally developed for the entertainment industries, is now available in the UK and Europe for other industry sectors involved in M&A activity. Its unique attribute is that the person insured is unaware of the insurance – in fact, it is a policy condition that they are not made aware – and no medicals are required.
John Silcock, Director of Tysers’ Entertainment Practice, explains: “We originally developed this product specifically for the music industry – so that record companies and music publishers could take out insurance on the life of an artist, without the artist being aware of it, to provide cover for advances, future royalties and other future earnings. It was a ground-breaking product at the time as it allowed music businesses to insure the key provider of their income – the artists – without having to ask the artist to undergo a medical or without them even knowing about it. And importantly, the product worked – we successfully settled several large claims.
“After speaking with various dealmakers and advisers, as well as from personal experience having sold a business myself (leading entertainment insurance broker, Robertson Taylor), it occurred to me that this product could help the M&A market too,“ notes John.
Not only does this insurance policy help dealmakers, it can also be purchased by the transaction advisers – especially important if their work is weighted towards a success fee. Another benefit of the product is its ease of purchase; all that’s needed is the completion of a simple questionnaire and execution of an NDA.