Warranty and Indemnity Insurance

warranty-indemnity-insuranceMergers and Acquisitions Warranty and Indemnity insurance is an individually tailored bespoke insurance that is designed to protect against losses arising from a misrepresentation or breach of warranty that is given during the course of the sale of a business.

The policy can be purchased by either party to the transaction albeit the majority of policies are taken out by the buyer:

 

  • Buyer Side Policies protect the buyer against losses caused by a misrepresentation or breach of warranty whether these be either innocent or fraudulent.
  • Seller Side Policies indemnify the seller in respect of their liability for loss arising from an innocent misrepresentation or a claim under the tax covenant

The chief advantages of the Buyer Side policy is that the buyer can recover directly against the policy without the need for legal action against the seller and can be used to cover any fraudulent misrepresentation made by the seller.

These policies are single premium non-renewable contracts of insurance. Traditionally these products have been more attractive to buyers and sellers engaged in “larger” transactions due to the restrictive premiums available in the market but with the advent of products with no “minimum premiums” they are now more affordable to all.

Quotations for M&A Warranty & Indemnity Insurance products are by definition not standard in their nature and are very much dependent upon the specific terms of any contract for merger and acquisition. If you would like to discuss your requirements with a broker please call us directly on 0161 300 2930 or complete the enquiry form below and we shall be happy to call you to discuss in confidence.

 
0161 300 2930 Blackfriars Group