W&I vs. RWI In Cross-Border M&A: Key Differences And Evolving Market Trends

Written by: Malakut, Philip Frerks, Marcus Wolter, and Elizabeth Bestwick

Transactional risk insurance has become a core feature of modern M&A, particularly in cross-border deals where differing legal traditions, disclosure norms, and risk tolerances can complicate negotiations. While warranty and indemnity insurance (W&I) and representations and warranties insurance (RWI) serve the same fundamental purpose, avoiding sell-side liability while protecting buyers against unknown historical risks, their structure, pricing, disclosure mechanics, and underwriting processes differ meaningfully between Europe and the United States.

Understanding these distinctions is critical for buyers and sellers navigating transatlantic transactions, where the choice of insurance product can materially shape deal economics and post-closing risk allocation and where the governing law of the purchase agreement generally determines whether W&I or RWI is the relevant solution.