Representations & Warranties Insurance: Understanding The Underwriting Process, Timeline, And Key Coverage Terms

The use of representations and warranties insurance is becoming increasingly commonplace in M&A transactions, particularly in competitive auction processes where use of the product has become almost ubiquitous. While much has been written about the deal terms of M&A transactions that make use of representations and warranties insurance, there is little practical guidance available that addresses either the underwriting process and timeline, or the negotiation of key policy terms. These areas can be challenging for parties using a representations and warranties policy for the first time, and this commentary is intended to provide a high-level overview of representations and warranties insurance to help demystify an otherwise imposing process.