Warranty and indemnity insurance (W&I)
Protect your interests in every M&A transaction.
Warranty and Indemnity (W&I) insurance is key to mitigating risks in mergers and acquisitions operations.
The warranties and representations made by the seller about the acquired company are fundamental to the valuation of the transaction. If these prove to be inaccurate or misleading, claims may arise that put the investment at risk. Our warranties and indemnities (W&I) policies protect both parties against potential litigation and financial losses, providing peace of mind throughout the M&A process.
Highlights
It is the most common M&A insurance, which can be promoted by the seller (seller-side), the buyer (buyer-side), or by a combination of both (stapled or sell-buy flip).
Coverages
W&I Seller Side
- Protection against the seller's liability for unintentional distortions or misrepresentations in the M&A transaction documents.
- Designed to respond in case the buyer makes a claim against the seller for breach of the established warranties or tax agreements.
- Allows the seller to protect against risks associated with the sale.
- Typically used at the end of the fund's lifecycle.
W&I Buyer Side
- Protects the buyer in case of non-compliance by the seller of the representations and warranties provided in the SPA (both unintentional and fraudulent errors).
- Offers key advantages over a Seller-Side policy: The insured can claim directly from the insurer, without needing to resort to the seller or guarantor/s.
- Provides compensation in case of seller fraud.
W&I Stapled or Sell-Buy Flip
- Promoted by a seller looking for the buyer to subscribe to a Buyer-Side policy, maintaining protection for the seller.
- It allows for the division of W&I insurance costs between seller and buyer.
- It requires the intervention of independent teams by the broker or co-brokering agreements to avoid conflicts of interest, even if they work with a single pre-selected insurer.
Warranty and indemnity insurance (W&I)
How can we help you?
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