M&A – Warranty & Indemnity Insurance
We offer our clients access to bespoke Warranty & Indemnity insurance solutions that enable them to transfer M&A related risks to the insurance market for breach of warranty, a claim under a tax covenant or misrepresentation in the underlying acquisition agreement.
Warranty & Indemnity (W&I) also known as Transactional Risk Insurance (TRI) transfers the risk associated with representations, warranties or indemnities within a merger, acquisition, or recapitalisation agreement to the insurance market.
A single policy can cover a diverse range of known and unknown risks including title to assets or shares, accuracy of the accounts, taxation, intellectual property rights and environmental matters.
Traditionally used to overcome specific deal issues, the trend now is for Buyers and Sellers to use W&I proactively – by allowing for the release of capital from escrow and improvements to Internal Rates of Return, or the gaining of a competitive advantage in an auction scenario.