Warranty & Indemnity insurance
Any deal is likely to have certain elements where you’re uncertain or uncomfortable. Warranties and Indemnity (W&I) insurance is a powerful tool to streamline negotiations between the parties, offering financial protection for unknown risks that lead to warranty breaches.
Warranty & Indemnity insurance can allow the seller to limit its liability to a low level, while also giving the buyers their desired protection. It covers breaching warranties or a claim under the tax covenant set out in the underlying acquisition agreement.
Every deal is different, so the insurance contracts must be bespoke; tailored to match the deal covenants precisely. We handcraft solutions to help you get your deals over the line, without the sleepless nights.
The W&I specialists who make up our team have backgrounds in corporate and tax law, investment banking and insurance.
Who is W&I insurance for?
The buyer or seller. The seller will often introduce insurance to the deal but, in 9 out of 10 deals, the buyer is the policyholder. A buyer-side policy affords the buyer more control and comfort; they can claim directly from the insurer, with no need to involve the seller. The insurer will waive subrogation rights against the seller (barring seller fraud, of course).
W&I can also be used in place of escrow funds so that proceeds are distributed to investors immediately rather than tied up.