In the past 12 months there has been a reported
increase in M&A activity globally and a corresponding uptake of
Warranty & Indemnity (W&I) insurance products sold to an
expanding market. This heightened activity increases the risk of
W&I claims being made and notified to insurers. In this article
we take a look at the steps required to be taken by insurers in
resolving W&I insurance claims in the context of the present
Australian and global landscapes.
Warranty and indemnity insurance – what is it?
In the 1990s, insurers identified that during the negotiation of
a sale and purchase agreement there will often be disparity between
parties over the warranties a seller is prepared to give and those
a buyer is prepared to accept. W&I insurance (or
Representations and Warranties Insurance, as it is known in the US)
allows the parties to bridge that gap, providing some certainty to
the warranties or indemnities provided by transferring the
financial risk of any breach
