Warranty & Indemnity Insurance

A Warranty and Indemnity (W&I) policy is an insurance policy that can be used in the context of buying or selling a company. It is typically used to protect the buyer from any financial losses that may arise due to breaches of warranties or tax indemnities provided by the vendor in the Share and Purchase Agreement (SPA).

In a typical transaction, the vendor provides certain warranties and indemnities to the buyer regarding the company being sold. These warranties and indemnities are meant to assure the buyer that the company’s financial and legal status is as represented. However, if any of these warranties or indemnities are breached, the buyer may suffer financial losses.

To mitigate this risk, the vendor can obtain a Warranty and Indemnity policy. This policy transfers the risk of potential breaches of warranties and tax indemnities from the vendor to the insurance company. If a breach occurs, the buyer can make a claim against the Warranty and Indemnity policy to recover their losses, instead of pursuing the vendor directly.

By using a Warranty and Indemnity policy, the vendor can achieve a clean exit from the company sale. It provides an additional layer of protection for the buyer and can help facilitate the transaction by giving the buyer confidence in the vendor’s representations. The policy also allows the vendor to limit their potential liability and move on from the company without the ongoing risk of warranty claims.

Overall, a Warranty and Indemnity policy can be a valuable tool in mergers and acquisitions, providing financial protection and peace of mind for both the buyer and the vendor.

 

We work closely with our clients to understand their needs and tailor the Warranty & Indemnity Insurance policy accordingly. This includes considering the size and nature of the transaction, the level of risk involved, and any specific concerns or requirements of the insured party.

Our team has extensive experience in structuring Warranty & Indemnity insurance policies and negotiating with insurers to ensure the best possible coverage and terms for our clients. We also provide ongoing support throughout the transaction process, including claims handling and assistance with any disputes that may arise.

By utilising Warranty & Indemnity insurance, buyers can have peace of mind knowing that they are protected against any potential losses resulting from breaches of warranty or misrepresentations by the vendor. This allows them to proceed with the transaction with confidence, knowing that their investment is safeguarded.

Overall, our specialist team is dedicated to providing tailored and comprehensive Warranty & Indemnity insurance solutions to meet the specific needs of our clients and ensure a smooth and successful transaction

 

Contact our Team today