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Podcast 160 – How does Insurance fit in with Exit Planning?

How does Insurance fit in with Exit Planning?

#PoisedforExit had the good pleasure today of interviewing Derek Gruber, Managing Director for Cox Insurance. Derek has an impressive IT background that comes in handy when he counsels his clients in Cyber Liability coverage.  Derek said that Cyber Liability terms and coverages change regularly, in order to keep up with the rampant cyber crime we're all trying to avoid.  The truth is that it's not a matter of if, but a matter of when. The criminals don't tend to discriminate when it comes to company size or industry anymore, but they do tend to like hacking healthcare companies and financial services. Derek said that if your system is breached and you have cyber liability, your company will be assigned a cyber liability coach, who will work with you to get things back up and running as well as help with training your staff on what to watch for in the future. In order to take a proactive approach to this, you need to work with a Cyber Security firm who actually assesses your current risk

How does this tie in with exit planning? If a buyer is interested in your business and learns you have no cyber security measures in place, it could derail the transaction, it's that simple. Most insurance carriers have protocols to help you get approved for the coverage, but it's a good idea to get an independent assessment done first!

Risk assessment during Due Diligence is another service that Cox Insurance provides. They'd actually prefer to work with the business owners well before a Purchase Agreement is drafted, so the seller can be more in control and less vulnerable to demands or discounts by the buyer. 

Tail coverage insures the seller (or buyer) into the future, going beyond the normal time period that a seller would warrant. Setting this up can make sense in certain situations when a seller may be anticipating some kind of claim into the future. 

There's so much more to what Derek shared!  Listen to the show here

Connect with Derek Gruber here and Julie Keyes here

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Julie Keyes
Julie Keyes

Founder & Owner at KeyeStrategies, LLC

Julie is a Certified Exit Planning Adviser and Value Growth Advisor with 30+ years of experience. She works with business owners who seek to understand and maximize their exit and critical transition options.

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