Private Equity

Representations and warranties insurance acts as a crucial safety net during negotiations between buyers and sellers in business transactions. It fills gaps related to escrow amounts, indemnification caps, and survival periods of representations and warranties, providing financial protection for breaches outlined in the purchase agreement. These policies are meticulously tailored on a deal-specific basis with minimal exclusions, such as criminal fines/penalties and knowledge of breaches/fraud by the insured’s team. The coverage spans all representations and warranties in the agreement, and policies can be obtained by either the buyer or the seller, depending on their goals. Representations and warranties insurance ensures a smoother transaction process, mitigates risks, and offers financial security to both parties involved. defense costs, which arise from breaches of representations and warranties made by a target company in the purchase agreement. The R&W insurance typically covers all representations and warranties contained in the purchase agreement, but policies are completely tailored and negotiated on a deal-specific basis with very few exclusions from the insurance carrier. The common exclusions found in these policies are criminal fines/penalties, knowledge of breaches/fraud by the insured’s deal team, and post-closing purchase price adjustments.  In a transaction, policies can be obtained for either the buyer or the seller depending on what the parties want to accomplish.