Warranty & Indemnity(W&I)insurance has increased in
popularity in recent years, especially in private merger and
acquisition(M&A)transactions. In the past five to ten years,
W&I insurance has become a mainstream and widely applied
M&A solution for larger and smaller M&A transactions. Both
private equity and strategic parties have come to realise that
W&I insurance not only facilitates clean exits for sellers by
replacing escrows or contractual claims under an SPA with an
insurance policy, but also provides buyers with extended warranty
coverage (in terms of scope and time periods) as well as a solid
and professional counterparty in case of a warranty claim.
The standard W&I insurance policy is an attempt to reach a
compromise between the commercial advantage and overall appeal of
using a W&I insurance on the one hand and the requirement by
underwriters that the insured and their advisors still conduct
comprehensive due diligence to confirm the
accuracy of the
