Parties to business acquisitions use indemnification clauses to provide security for harm that may result following the closing of the transaction. Indemnification obligations require one party to compensate the other for...more
The Court of Appeal has found that an alleged typo in a warranty and indemnity insurance policy did not amount to an obvious mistake. As a result, the insurance did not cover the claimed breach of warranty....more
When it comes to protecting your business, having the right insurance coverage is crucial, but how do you know what types of coverage you need? The first step is understanding some of the key different types of insurance...more
As buyers seek acquisition opportunities worldwide, they often encounter sellers resistant to accepting meaningful (if any) liabilities for potential pre-closing exposures, causing buyers to look to the insurance market for...more
The U.S. Court of Appeals for the Ninth Circuit, applying Nevada law, has held that a policy’s warranty exclusion bars coverage for a demand letter alleging that the insured was on notice of fraud by the named insured’s...more
Given the current state of the market, deal flow is down and, therefore, so is the number of submissions getting sent to representations and warranties insurance (RWI) underwriters. Underwriters are poised to strike when the...more
The use of representations and warranties insurance (RWI or R&W) has become increasingly mainstream; it is used in an estimated 75% of private equity transactions and 64% of the time by larger strategic acquirers. Woodruff...more
Changing market dynamics have led buyers to assess available options to address post-closing target company issues. Amid the buoyant market of 2021 and early 2022, compressed deal timelines and frenzied competition...more
Warranty and indemnity insurance may remain a staple of European private equity, but are buyers changing course? Warranty and indemnity (W&I) insurance has become an important component of European PE transactions in...more
The United States District Court for the District of Nevada, applying Nevada law, has held that a warranty letter executed by the insured’s CEO prior to the issuance of an excess D&O policy barred coverage for a claim made...more
Our Mergers & Acquisitions / Private Equity Team recently attended Marsh’s panel on its 2021 Global Trends Report on transactional risk. Consistent with what we have seen in the market, industry experts confirmed that an...more
Warranty and indemnity insurance (W&I) in recent years has become a customary aspect of private equity and other M&A transactions, with investors well aware of the deal-enabling benefits (in particular, the transfer of risk...more
We looked at 28 deals across Asia that were signed or closed pre-COVID in which the buyer or a group of affiliated buyers acquired all or a significant majority of the outstanding equity of the target, examined the common key...more
In a climate where there are so many unknown factors challenging valuation methodologies, we explore a number of mechanisms that European dealmakers may consider during the Coronavirus (COVID-19) pandemic in order to bridge...more
We have seen continued increase in the use of W&I insurance, particularly in Private Equity backed deals, and across the spectrum of transaction sizes. Insurance limits placed globally by Marsh in 2019 grew by 51% from 2018,...more
The long seller’s market may be over, which is welcome news for many companies that are eager and able to acquire or expand a business. Many businesses and business owners have struggled mightily under the COVID-19...more
In a complex and competitive market, minimising and mitigating risk in M&A is a key concern for deal teams. High demand for assets saw strong deal volumes and values in 2019, following a standout year in 2018. The search for...more
A New Jersey federal judge recently applied Tennessee and California law in dismissing a proposed class action concerning allegedly leaky water heater sensors/valves (valves) made by Honeywell International Inc. The decision...more
Join Williams Mullen Partners Jon Bliley and Hal Johnson as they discuss the issues that may arise should you face a transaction with a delayed closing where a rep and warranty policy is the buyer’s sole source of...more
Current W&I Insurance Market: Burgeoning market and growing claims experience - Private equity investors are well aware of the deal-enabling benefits of warranty & indemnity insurance ("W&I"). ...more
Global mergers and acquisitions transactions hit $3.5 trillion in 2018 making it the third-largest year on record for M&A by value. Within the private equity and real estate investment worlds, the insatiable appetite for...more
Warranty and indemnity insurance (W&I) has become a common feature of European transactions in recent years, amid a strong sellers’ market that has enabled vendors to offload risk to buyers. According to the most recent...more
With few exceptions, an application or warranty statement is an essential document to secure insurance coverage, and can actually possess great power to determine or limit coverage. Insurers may seek renewal applications or...more
Increased competition among insurers and improved policy terms suggest the W&I insurance market is becoming more favourable to investors. In real estate transactions, buyers and sellers naturally pursue conflicting...more