Insurance for search funds

A search fund goes through three stages, and each one calls for different insurance: the search, the acquisition, and running the company you bought. Coverage arranged during the search won’t automatically stretch to the next stage.

Cilantro Risk works with searchers at each stage. We tell you what you need now and what can wait until there’s a deal, and we handle the insurance side of the closing when you get there.

Request a call

During the search

At this stage the business is small. There’s you, your investors’ capital, perhaps some outside advisers, and a lot of confidential information about companies you’re evaluating. Insurance usually comes up because investors or a contract ask for it, or because you want protection for the decisions you make running the search entity.

There’s no single product every search fund buys, and a policy isn’t a fit just because it has search fund in the name. We look at what your search entity does and who is involved, and recommend only what matches.

At the acquisition

Once you have a target, there are two jobs. One is the target company’s own insurance: what it has today and what happens to it at closing. The other is coverage for the new ownership structure and board. A company’s existing D&O policy usually stops covering new events when the company is sold, so the handover has to be planned.

We run it as a checklist with dates, alongside your lawyers and lender:

The entities and directors that will exist the day after closing
What happens to the company’s current management liability policies
The proof of insurance your lender and investors need
The company’s property, liability, and employee-related coverage

After closing

Now you’re running an operating company, and you’re a CEO and a director. The company’s insurance should follow its products, employees, locations, and contracts, and its D&O should cover you and the board.

We stay on after the deal. At the first renewal we go back over the program against the business you now know, including any hires, operational changes, or benefit plans added since closing.

How to start

Tell us where you are: starting a search, approaching a letter of intent, preparing to close, or already operating. A short call is usually enough to work out what you need at your stage.

If you don’t have a target yet, that’s fine. We’ll separate what needs deciding now from what depends on a future deal.

Common questions

Is there a standard search fund insurance package?

No. What fits depends on your stage. A searcher with no target needs far less than one about to close on an operating company with employees and customers.

Does the acquired company’s insurance continue after the sale?

Not automatically. Many policies change or end when ownership changes. We find out what happens to each policy at closing, well before the closing date.

When should we start talking about insurance for the deal?

As soon as you know the key requirements or dates. That gives us time to gather information and coordinate with the people running the transaction.

Talk to us about your insurance

Tell us about your business, what you’re trying to decide, and any deadline. We’ll follow up to set up a call. You don’t need to upload anything now.