To advance against the challenges posed by ESG, the world requires innovation. Whilst we will certainly assist adventurous and groundbreaking organisations with their general asset protection requirements using conventional insurance products where appetite maybe limited, we will also help these organisations with challenges they may face with raising investment by supporting their lenders using slightly lesser-known risk transfer solutions.
New technologically advanced infrastructure generally requires a significant capital investment. The affordability to either pay back the debt or to provide a return on the capital invested is a fundamental part of any model. However, the uncertainty of whether new products will perform at a projected level over the financial term will often make obtaining funding a challenge.
We are able to work with forward-thinking risk carriers together with subject matter experts to provide a performance warranty policy. This will provide a warranty, supported by an A rated insurance company balance sheet, which ensures the generation of the projected level of revenue over the desired period, which in turn can unlock the necessary investment.
The unforeseen problems associated with the design or construction of a new structure can be significant. A conventional property policy will only cover the loss or damage resulting from an insured incident, such as a fire or natural peril. Inherent or latent defects insurance bridges this gap by providing long-term coverage for damage caused by structural defects.
Inherent defects insurance provides first-party coverage over a ten year period. This can reassure all project stakeholders that, coupled with a conventional property damage and business interruption arrangement, their interest is adequately protected and doesn’t rely on a lengthy legal battle to prove negligence for the professional indemnity of the construction professionals having to respond. For projects where the investment return requires longer-term protection, the policy period can be increased to more than 10 years.
The ESG sector has been a recipient of significant capital in order to facilitate the completion of large, world-saving projects. As these projects complete, the investors either wish to have their capital returned and thus sell their investment or alternatively carry out some form of refinancing, which in the fund management arena, in known as a “secondary”.
In both cases, the transaction must be completed on an arm’s length basis, part of which includes the vendor providing warranties and indemnities for things such as the corporate structure, commercial contracts, intellectual property, and tax, to name but a few. In cases where warranties and indemnities must be given, the directors of the businesses may wish to retain an element of the sales proceeds to ensure they can be funded in the event of a successful claim. In the case of a distressed sale, the transaction may not be able to proceed if the business is already in administration and these warranties aren’t available from the previous directors.
We use insurance products and capacity to protect pro-ESG organisations and help to facilitate their growth.
Sustain Insurance Brokers is a trading name of Sustain Brokers Limited which is registered in England and Wales under company registration number 14309360. Sustain Brokers Limited is also an appointed representative of TEn Insurance Services Ltd, trading as Eleven, which is authorised and regulated by the Finance Conduct Authority (FRN 314593).
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