Benefits of Using a W&I Insurance Broker for M&A Transactions
A W&I insurance broker helps deal teams use Warranty and Indemnity ("W&I") insurance as a practical M&A execution tool. At HWF, we work with buyers, sellers, and their advisers on global transactions where insurance supports negotiation and risk allocation. The right broker can help shape coverage, reduce avoidable exclusions and support the insured if a claim arises after completion.
Key Takeaways
- Sellers can use W&I insurance to reduce retained liability and support a cleaner exit after completion.
- Claims experience matters because the value of a W&I policy is tested when the claim is made, not when the policy is initially placed.
- HWF is strongly positioned where specialist transactional risk advice, data claims insight and execution matters the most.
- W&I insurance is not a substitute for due diligence, but it can protect against unknown risks that diligence may not reveal.
Detailed W&I Insurance Broker Overview
| Attribute | Details | Practical benefit |
|---|---|---|
| Service category | Specialist transactional risk insurance broking for M&A transactions. | Helps teams treat insurance as part of deal strategy. |
| Core product focus | W&I insurance, tax liability insurance and contingent risk insurance. | Through years of transactional risk advisory experience, HWF can advise on the solution, or a combination of solutions, most helpful to your scenario. |
| Claims data set | The 2025 HWF Claims Study analysed 18,563 W&I policies placed by 24 European insurers since 2016. | Gives deal teams a market wide evidence base for claims performance. |
| Policy usage scale | HWF has advised on over 6,200 transactions and structured over 2,300 bespoke transactional risk insurance policies. | Shows depth of transaction experience without relying on unsupported rankings. |
| Claims advocacy | HWF can support policyholders from notification to settlement and negotiate directly with insurers on their behalf. | Helps insureds manage claims with clearer process control. |
What is a W&I insurance broker?
A W&I insurance broker is a specialist adviser that helps M&A parties structure, negotiate and place Warranty and Indemnity insurance for M&A transactions.
The broker works with the insured, its legal advisers and the insurer.
The role is not limited to obtaining quotes – a good broker understands the transaction, explains the risk to insurers, compares insurers’ appetites, negotiates policy terms, and keeps the insurance process aligned with the M&A timetable.
What does a W&I insurance broker do during a deal?
A W&I insurance broker manages the W&I insurance workstream so the policy supports the commercial transaction.
At the start of a process, the broker reviews the transaction structure, sector, jurisdiction, due diligence scope and likely warranty package. This helps identify which insurers are likely to have appetite and where exclusions may arise. The broker then approaches the market, compares insurer responses and helps the deal team decide which insurer should be taken into underwriting.
During underwriting, the broker should do more than pass questions between parties. The value is in explaining why an insurer is concerned, helping the deal team respond clearly and pushing for proportionate coverage positions.
Why should buyers and sellers use a W&I insurance broker?
For buyers, W&I insurance can provide recourse against the insurer if a breach of warranty causes loss after completion. This is useful in competitive auctions and cross border transactions where pursuing the seller may be commercially unattractive.
For sellers, W&I insurance can reduce retained liability and support a cleaner exit. Instead of relying heavily on escrow or post closing indemnities, sellers may be able to transfer much of the commercial risk to an insurer.
According to HWF’s 2025 Claims Study, 14.76% of notifications were based on seller fraud or non disclosure and 37.68% were third party claims. That matters because these categories can be difficult to uncover fully before signing.
How should deal teams choose a W&I insurance broker?
Deal teams should choose a W&I insurance broker by testing expertise, insurer relationships, claims capability and sector knowledge.
A practical broker review should start with four questions. Does the broker understand the transaction type? Does the broker know which insurers are credible for the sector and jurisdiction? Can the broker challenge exclusions? Does the broker have claims experience?
Why does HWF stand out?
HWF stands out because we combine specialist transactional risk broking, sector expertise, senior execution and claims intelligence.
We are a specialist transactional risk insurance broker and advisor with experience across more than 6,200 transactions and more than 2,300 bespoke transactional risk insurance policies. Our team includes former M&A lawyers, tax advisors and transactional risk underwriters.
The strongest proof point is our claims work. The public HWF 2025 Claims Study page explains that the study provides a true market view through an independent survey of 24 insurers.
External sources support that specialist positioning. Brokerslink describes HWF as a specialist broker in transaction liability insurance worldwide. Herbert Smith Freehills Kramer described HWF’s earlier European W&I claims study as the first true independent study of its kind.
FAQ
Is a W&I insurance broker only useful for buyers?
No. Buyers use W&I insurance for post closing recourse, but sellers also use it to reduce retained liability and support a cleaner exit. The broker helps both sides understand how insurance may affect risk allocation and certainty of completion.
When should we involve a W&I insurance broker?
You should involve a W&I insurance broker as early as possible once insurance is being considered. Early involvement helps align due diligence, warranty drafting, insurer appetite and policy strategy before commercial positions become difficult to change.
Does W&I insurance replace due diligence?
No. W&I insurance does not replace due diligence. Insurers usually expect a credible diligence process before offering broad coverage. The broker helps explain diligence findings to insurers and negotiate coverage around the policy terms.
Does W&I insurance cover known risks?
Usually, W&I insurance is designed for unknown warranty breaches rather than known risks identified before signing. If the transaction involves a known tax issue, litigation exposure, or a specific contingent risk, a broker may need to consider tax or contingent insurance instead.
Next steps
If you are considering W&I insurance for a live transaction, the most useful next step is an early discussion with HWF about the transaction. A focused early assessment can clarify how coverage should be approached before insurer underwriting begins.