As global insurance and risk management professional service firms, Marsh & McLennan and Aon do great work and have solid reputations in the world of M&A insurance. Along with Rubicon M&A Insurance Services, LLC, they are the only companies offering this specialized type of insurance to companies in Silicon Valley.
Marsh & McLennan is a global insurance firm headquartered in New York City, and offers thousands of insurance and financial products. Described by CEO Daniel Glaser as a “global growth company,” Marsh is the 800lb gorilla of insurance. Insuring M&A deals is a very small part of their $13 billion overall business.
Aon, an $11.6 billion conglomerate, operating 500 offices in 120 countries also insures M&A deals. Like Marsh, this niche of insurance is a small piece of Aon’s overall business.
Rubicon is a boutique insurance brokerage focused on the middle market and deals up to $750 million. Rubicon deals exclusively with domestic transactions. Rather than M&A being a small piece of a very big pie, for Rubicon, the focus is on M&A. You get our full attention when you work with us. We’re also based in Silicon Valley – you can meet with us face-to-face.
So, when should you choose Marsh or Aon or Rubicon? Let’s find out.
The world needs Marsh & McLennan and Aon; they’re a vital part of our industry. Someone has to insure Disneyland and the multinational mergers that reach across the globe and not all of us can do that.
These two companies are the largest and have the most resources that can be brought to bear for M&A insurance. They have a global reach, huge staffs in offices worldwide, and a multitude of products serving Fortune 500 companies.
They’re one-stop shops for just about any line of insurance, as well as risk management, investment advisory services, management consulting, and more.
They can insure tax liability, cross-border M&A deals, and offer elaborate financing and risk management structures for both known and unknown events surrounding an M&A transaction. They have the capacity to take on very esoteric risks and structures.
For example, say one company is acquiring another. The Seller informs the Buyer that they are being audited by the IRS. They expect their penalty to be $3 million. The Seller can transfer the liability to the insurer with Contingent Liability insurance.
Essentially, they can buy a policy for $3 million, which they were going to pay anyway. But if the penalty is more than that, the insurer pays the rest. This is a service some companies will need… but many won’t.
Like Rubicon, Marsh & McLennan and Aon have the necessary resources and experience. And we all understand the role of an experienced broker in making the claims process in R&W as efficient and painless as possible.
There’s a lot to like about these companies. But clearly there are disadvantages to working with such a big organization.
Unlike Rubicon, which focuses on middle market deals, Marsh & McLennan and Aon work on deals worth billions. And they offer a huge variety of products, including their M&A insurance products.
The point is that straightforward R&W and Tax Liability insurance is just one of the many things they do. It’s clear when you visit their website – just see how many clicks it takes you to find a page on Representations and Warranties.
With so many clients on their roster, it can be hard for you to reach people. In fact, if you call your local office, the person on the phone will struggle to connect you with the appropriate contact because there are so many employees handling so many different types of insurance and other products. They may not immediately know which office or which person to connect you with if you need help with Rep and Warranty insurance.
In some ways, you’re just a number. And once you’re in… if they have a $2 billion M&A deal on their desk, your $100 million deal may not be a priority.
Unless you have the need for an exotic, complex insurance product, you may be better served by a firm that specializes in insuring mid-market M&A deals.
Rubicon is all about the deal. We have no conflicts with other insurance lines. Our goal is not to sell you more insurance. When it comes to M&A, we do two things – R&W and Tax Liability insurance – and we do them well.
Our small but dedicated team is responsive and flexible, ready to work closely with you to get the most appropriate policy for your M&A deal. When you pick up the phone or send an email, you will hear back promptly from an executive at Rubicon.
As your insurance broker, we focus on your mission, working closely with you and your M&A team from initial contact to the delivery of your R&W policy.
We don’t get distracted from static and bandwidth that comes with offering so many products.
And our focus allows us to develop strong working relationships with vital players in obtaining these policies: Underwriters.
It’s interesting. Certain Underwriters have a taste for certain industries.
And we know who likes what.
Some don’t like to insure deals that involve real estate or those with potential big regulatory exposure, such as healthcare. Specific Underwriters have specific likes or dislikes because of their familiarity or past experience with that class of business.
We can always land the Underwriters who like to work in your industry.
We can leverage our relationships to approach the right Underwriters to ensure you get the best policy at the best price in a timely manner.
Location is another big advantage to working with Rubicon. With the larger players, most of the M&A deals would be pushed to Chicago (Aon) and New York City (Marsh & McLennan) – their headquarters.
Rubicon is right here in Silicon Valley. We’re closer to the ground for meetings with founders and owners, M&A attorneys, and everybody else involved in a merger or acquisition.
We’re very easy to find, easy to contact, and responsive.
For M&A deals under $750 million, especially in Silicon Valley, Rubicon can provide the R&W coverage – and Tax Liability insurance, if necessary – you need to protect your investment.