The growth of transactional risk insurance has been driven by buyers and sellers using the products as a strategic tool to materially reduce the contractual liabilities of the seller – enabling them to execute transactions more efficiently.
A seller will typically resist having to tie up sale proceeds or have any residual liabilities post completion. A failure by the parties to reach agreement on liability apportionment can adversely impact the transaction; making negotiation difficult, affecting the target’s value, or leading to deadlock.
A seller-initiated buyer warranty & indemnity (“W&I”) insurance policy is the tool of choice for bridging this gap in the expectations of the parties.
This solution is particularly relevant for the following parties:
There are a number of stages involved in the securing of insurance terms and the placement of an insurance policy. It should be noted that this will always be tailored to the specific requirements of each transaction.