To help businesses, investors, and deal professionals better understand the evolving M&A market, Robert Connolly – a partner in and leader of LP’s Corporate Practice Group – shares a series of conversations with M&A experts.
Below is his conversation with Ryan Seager, private equity practice leader at Associated, a leading privately-held insurance and risk management firm that helps businesses and individuals assess and manage their insurance needs. Ryan is a trusted advisor to private equity sponsors of all kinds, helping them understand the risks associated with their investments and how to navigate them properly.
In this first of a two-part Q&A conversation, Ryan talks about Associated’s role in private equity and M&A transactions, the insurance-related risks private equity sponsors should be aware of, and how they help sponsors navigate those challenges. In part two, Ryan discusses current trends and challenges, regulatory changes and shifts, and insurance-related best practices for private equity sponsors.
The responses below have been edited slightly for brevity and clarity.
Can you provide an overview of Associated and its service offerings?
Associated is a premier, privately held insurance brokerage and advisory firm. We go beyond traditional insurance placement, offering strategic advisory services, particularly in M&A and private equity—one of our fastest-growing practice areas. While the insurance brokerage industry is consolidating rapidly, we have made a deliberate choice to remain independent, fostering an entrepreneurial culture that allows us to better serve our clients. We are trending toward becoming a top 50 privately held firm in the country.
Our practice is built around three core verticals:
- Commercial Insurance – Providing property & casualty products and risk management solutions.
- Employee Benefits – Covering all major health and welfare plans, including medical, dental, vision, 401(k), and ancillary benefits.
- Private Client Services – Serving high-net-worth individuals with personal asset protection, life insurance, and estate planning solutions.
Private equity and M&A advisory is a key focus, alongside commercial real estate, both of which are growing rapidly. We typically engage once an LOI is signed, conducting front-end due diligence to assess existing insurance and benefits programs. Our due diligence reports don’t just summarize coverage; they provide a strategic roadmap for optimizing risk management and benefit structures throughout the hold period to maximize investment value.
Within the private equity and M&A practice, is there a particular segment of the middle market where you focus?
Our sweet spot is the lower middle market. We primarily work with companies generating between $10 million and $250 million in revenue at the time of initial investment, with EBITDA ranging from $1 million to $30+ million. As these businesses scale through organic growth and acquisitions, their insurance and risk management needs to evolve, and we tailor our approach accordingly.
We are industry-agnostic but frequently operate in healthcare, manufacturing, distribution, real estate, financial services, consumer products, business services, and transportation—though our expertise extends well beyond these sectors.
What unique challenges do you help private equity clients address?
One of our core values is “We take the needs of those around us personally.” We tailor our approach to align with each buyer’s priorities to ensure a smooth transition at closing.
A recurring challenge in private equity is cost control. Insurance and employee benefits expenses can significantly impact EBITDA over the hold period. Many investment theses focus on driving efficiencies across a portfolio, and insurance is often an area where meaningful savings can be realized—especially for companies scaling through acquisition.
Our role is to create customized insurance and benefits programs that align with business needs while maintaining cost sustainability. We don’t just identify risks; we develop actionable solutions to mitigate them over the course of the investment.
How do you adapt services to private equity sponsors?
Our private equity client base is diverse, ranging from independent search funders acquiring a single business to institutional funds managing $500M+ vehicles. Each has different investment strategies and time horizons, but our approach remains consistent:
- Beyond Due Diligence – We don’t just assess coverage gaps; we develop a strategic action plan for the hold period to enhance business protection, employee experience, and investment returns.
- High-Touch Execution – We work closely with PE sponsors and management teams post-close, ensuring that insurance and benefits programs evolve in alignment with growth objectives.
- Customized Approach – Whether supporting a single-platform buyout or a complex roll-up strategy, we adapt our recommendations to fit the unique needs of each deal.
How can the diligence process help private equity firms manage risk?
Our private equity advisory services go beyond identifying gaps; we provide sponsors with actionable insights that materially impact the business. This is where strong advisory work differentiates a good partner.
Rather than just presenting existing coverage and deficiencies, we build a multi-year insurance strategy, breaking it down into 12-month increments so all stakeholders are aligned on priorities. Management teams have competing demands, and often, no one is solely responsible for insurance and benefits. By serving as an extension of their team, we ensure that nothing falls through the cracks.
For example, we frequently uncover workers’ compensation cost inefficiencies. A claims review might reveal that a company is overpaying by 20-30% due to a high experience modification factor. Instead of just noting the issue, we craft a proactive plan to improve claims management and reduce costs over time—directly impacting EBITDA.
What primary insurance-related risks should private equity firms anticipate during a transaction?
A few key risks sponsors should be aware of:
- Employee Benefits Liability & ACA Compliance – Companies crossing 50 or 100 employees trigger additional compliance requirements under the Affordable Care Act. We’ve seen deals where noncompliance led to costly penalties post-close. Our role is to assess exposure and quantify potential liabilities before the transaction.
- Stock vs. Asset Purchase Considerations – In stock deals, buyers inherit past liabilities, which can include unresolved insurance claims. We help sponsors evaluate legacy risks and structure appropriate insurance solutions, such as tail policies, to mitigate exposure. Even in asset deals, buyers can still face litigation risks that require coverage strategies.
- Reps & Warranties Insurance Exclusions – The R&W underwriting process often surfaces unexpected exposures. Diligence gaps or past claims history can impact policy pricing and coverage terms. Buyers need to carefully assess these factors to avoid surprises.
What are some common pitfalls in private equity transactions?
One major challenge is creative problem-solving for insurance gaps. For example, in an environmental deal, we’ve encountered situations where pre-existing contamination issues posed a roadblock to closing. By structuring a specialized insurance solution pre-close, we helped the buyer mitigate risk and move forward with confidence. A strong insurance partner understands how risk transfer strategies can shape the purchase agreement and serve as a tool to facilitate deal execution.
What should private equity sponsors know about transactional insurance products?
Reps & Warranties insurance (RWI) is the most relevant tool for deal execution, particularly in managing escrow and holdback structures. It enhances negotiations by shifting risk to an insurer, which is especially useful in deals with seller rollover (e.g., when a seller retains a 25-30%+ stake). In these cases, RWI insurance provides recourse via a policy rather than against the new business partner—preserving relationships and deal stability.
Beyond RWI, other transactional insurance solutions include:
- Contingent Liability Insurance – Covers judgments on pending litigation or other known risks that R&W policies exclude.
- Tax Liability Insurance – Mitigates exposure related to uncertain tax positions that could create financial risk post-close.
Properly structuring these policies can significantly de-risk transactions for sponsors.
How do private equity firms approach post-closing risks and insurance solutions?
Many PE-backed companies are experiencing institutional capital for the first time, and their insurance and benefits programs often need a complete overhaul to align with the investment thesis.
We focus on two critical areas post-close:
- Immediate Risk Mitigation – Ensuring that the business is adequately covered on day one, with any gaps addressed.
- Long-Term Strategy – Developing a roadmap for how insurance and benefits should evolve over the next 5-7 years to support value creation.
Protecting a business that has been acquired for tens or hundreds of millions of dollars is fundamental to investment success. We help sponsors navigate this process with clarity and precision.
How do you ensure clients are protected through the transaction phases?
We emphasize two key principles with our team and PE clients: clear communication and aligned expectations. Avoidable issues arise when communication isn’t early and frequent, leading to misalignment. To prevent this, we maintain regular touchpoints throughout the transaction, providing real-time updates on our process, outstanding items, and any critical risks that require deeper discussion.
From our perspective, protection during a transaction means two things:
- Identifying and Mitigating Material Risks – We ensure PE sponsors are aware of any material coverage gaps, employee benefit liabilities, or compliance issues. By addressing these early, we help develop strategic solutions that mitigate exposure and prevent last-minute surprises.
- Proactively Managing Deal Disruptors – A successful transaction is about managing risks effectively. If we uncover issues during due diligence that could materially impact the deal, we don’t just flag them—we work collaboratively to provide viable solutions that protect our clients’ interests and position them for success.
Our role is to ensure that when a deal closes, our clients are fully informed, well-prepared, and strategically positioned to maximize their investment.
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