Representations & Warranties Insurance

Representations & Warranties Insurance

In an increasingly aggressive M&A landscape, Representations & Warranties Insurance provides private equity fund managers, strategic and corporate buyers, risk managers and other stakeholders with a risk mitigation solution for uncertainties surrounding mergers and acquisitions. Available to either party, R&W policies provide protection against financial loss, including defense costs for certain unintentional and unknown seller breaches in the context of an acquisition or merger agreement.

Why Use Representations & Warranties Insurance?

  • Provides a secure and clean exit for both parties
  • Reduces Seller’s indemnification obligation to Buyer
  • Minimizes post-closing liabilities
  • Allows for greater flexibility in negotiating deal terms

Buyer’s Benefits

  • Enhances bid in auction process
  • Supplements / Replaces Seller’s indemnity
  • Increase indemnification afforded by the purchase agreement
  • Allow for smooth transition with target management team
  • Mitigate post-close Seller solvency concerns

Seller’s Benefits

  • Secures clean exit by reducing or replacing indemnification obligations to Buyer
  • Expedited sale process
  • Maximizes proceeds realized at deal close

Fully Customizable Transaction Solutions for Either Party in an M&A Transaction

CAPACITY – With over 20 carriers and managing general underwriters providing capacity in the US, solution exists
for deals of all sizes based on purchase price.

BUY & SELL SIDE PROGRAMS – While vast majority of policies are Buy-Side, either party can be insured and benefit from coverage.


  • LIMIT STRUCTURE – typically 10% of TEV in underlying transaction
  • PREMIUM – typically ranges between 2.5% – 4% of limits purchased
  • SELF-INSURED RETENTION – SIR is set as an aggregate amount for the policy term and is approximately 1% of TEV with reduction features at 12/18 months post deal closing
  • POLICY TERM – 3 Years for General R&W and 6 Years for Fundamental R&W
  • EXPEDITED UNDERWRITING PROCESS – Non-binding pricing indications can be procured within a matter of days, with complete underwriting process generally completed in under a week

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