As firms pursue growth strategies, expand their market reach and broaden their use of technology, the world of mergers and acquisitions continues to evolve. Warranty and Indemnity insurance can bridge the gap where both parties to the transaction don’t want the burden of liability.
Warranty and Indemnity (W&I) Insurance protects buyers and sellers from losses arising out of a breach of warranties and particular indemnities provided by a seller as part of a merger or acquisition.
The product offers a cost-effective way to bridge the gap in areas in which both parties to the transaction do not wish to take the burden of liability. The coverage follows closely to the warranties provided by the seller, subject to any risks having been identified through the buyer’s own due diligence process.
In the driving seat
W&I insurance offers many benefits:
- Allows transaction proceeds to be released in full from closing
- Expedites the negotiation process, closing the deal faster, putting the buyer in the driving seat of the target business sooner
- Enables buyer and seller to continue their relationship without the added complication of liability claims, particularly useful in transactions where founders/management may continue with the target business
- Offers improved terms in comparison to those given by a seller (e.g. lower retention, higher liability cap, longer claims periods)
- More attractive offering during an auction process as it offers a clean exit to sellers.
Proactive approach to claims
Inevitably, claims do occur. That’s when you really discover the value your insurance company delivers. We pride ourselves on our positive attitude and proactive approach to claims management. Our claims teams have a deserved reputation for the professional, efficient and sympathetic way they work with brokers and customers when losses are incurred.
Financial Lines expertise
We offer a range of complementary Financial Lines covers, including Commercial Crime, Directors’ and Officers’ Liability , Pension Trustees’ Liability and Professional Indemnity.
