Aon launches new liability practice

Aon’s risk management business has formed a new transactional liability practice to capitalise on growth in the market.

The dedicated arm, Aon Risk Solutions Transactional Liability Practice (TLP), will use existing expertise within the business, as well additional resources according to the global broker.

Aon Risk Solutions US retail arm chief executive Tom Fitzgerald said: “Transaction liability insurance products have become increasingly important as firms more aggressively focus on strategic acquisitions and divestiture of non-core assets.

“The ability to substitute insurance capital to address deal risks including representations and warranties, tax liabilities, litigation and other contingent risk can increase the probability of a deal closing. Given the increasing level of sophistication of these solutions, we expect adoption to increase significantly in the coming years.”

The practice will provide comprehensive transaction liability solutions to organisations such as private equity firms, organisations focused on mergers and acquisitions, as well as clients seeking innovative solutions for contingent liability exposures that impair their balance sheet or impede a potential transaction.

TLP leader Michael Schoenbach said: “We estimate more than $6bn of transaction liability limits were purchased globally in 2012. We believe this was attributable to a combination of lower cost, enhanced coverage, favourable performance of the products and better awareness of how to utilise them strategically.”