Representations and Warranties insurance is an insurance policy that is typically used to replace or bolster a seller indemnity or escrow in an M&A transaction. Under the terms of the policy, an insurance company will typically indemnify the buyer for losses resulting from an unknown breach of a representation or warranty in the definitive transaction agreement. Our Representations and Warranties Practice has assembled a group of former M&A lawyers and industry veterans with unparalleled transactional experience. We employ a Partner/Associate model on every deal to ensure 24/7 coverage. We aim to identify potential issues before they arise, and we leverage years of transaction advisory experience to maximize our placement value.
Representations & Warranties Insurance (RWI)
Our Service
Representations and warranties insurance (RWI) is an insurance policy that is used to replace or bolster a seller indemnity or escrow in a mergers and acquisitions (M&A) transaction. Under the terms of the policy, an insurance company will typically indemnify the buyer for losses resulting from an unknown breach of a representation or warranty in the definitive transaction agreement. Our RWI Practice has assembled a group of former M&A lawyers and industry veterans with unparalleled transactional experience. We employ a Partner/Associate model on every deal to ensure 24/7 coverage. We aim to identify potential issues before they arise, and we leverage years of transaction advisory experience to maximize our placement value.
Why clients consider RWI versus traditional indemnity
Economic Efficiencies
Rational pricing of risk and more accretive transaction.
Enhanced Protection
Buyer-friendly terms.
Partnership
Another set of advocates and advisors on your behalf.
Culture
Protects the partnership between buyer and seller with the transactional relationship between buyer and insurer.
SELLER BENEFITS
1. Maximizes return for seller
Enables sellers to use the proceeds of the sale immediately.
Maximizes return to owner/investors
2. Minimizes seller's post-closing exposure
Insurer takes the risk for liability, not seller
3. Avoids guarantee
Substitutes a creditworthy counterparty in lieu of a seller/parent guarantee
BUYER BENEFITS
1. More expansive protection
Fosters friendlier dynamic between the parties
Yields broader package of R&Ws and more favorable terms for the insured
2. Speeds up transaction/negotiation
Minimizes execution risk for the parties
3. Avoids potential conflicts
Critical tool for transactions with meaningful seller participation in the target business
Claims
After your policy is bound, we are there with dedicated transaction liability claims experts who, in conjunction and collaboration with our placement team, guide you through the most pivotal moment in the lifespan of any insurance policy — a claim. We will help shepherd you through your claim with real advice and counsel, bringing to the table the lessons learned in settling hundreds of millions of dollars of claims for our clients. We will be there with you every step of the way, helping you strategize for the best path for resolving complicated claims and leveraging our considerable market knowledge and expertise to optimize your claim’s outcome.
Edward Kim
