Representation And Warranty Insurance 2020 Update

More and more buyers are using representation and warranty insurance (RWI) to supplement or replace indemnities from a seller in the sale of a business in Canada. While some of our clients, particularly private equity funds, use RWI regularly, other clients find themselves having to quickly familiarize themselves with how it works, sometimes in the middle of a complex mergers and acquisitions (M&A) transaction. Whether you are a RWI expert or not, two recent market reports from AON and Marsh JLT Specialty provide helpful information about market trends, claims experience, typical breaches and claims settlement.

The two reports noted above, the AON Report and the Marsh Report, confirm predictions that greater awareness of the strategic value of RWI and heightened sensitivity to risk would lead to increased use of RWI in transactions. See our prior reports on the increasing use of RWI, the strategic application of RWI and the fundamentals of RWI.