Realising a project’s full potential: Contingent insurance

Warranty and indemnity (“W&I”) insurance is a common feature in M&A in the energy and infrastructure sector worldwide. Contingent risk insurance is gaining prominence to help unlock deals.

Both sellers and buyers use W&I as a strategic tool, allowing sellers to exit cleanly and reduce their tail liability while providing meaningful protection to buyers against breaches of warranties. The insurance market has become increasingly sophisticated and also diverse in its appetite for transactional risk insurance.

The increased use of W&I insurance to protect against unknown risks in M&A across a variety of infrastructure projects and technologies has also led to the development of a market of insurers who will cover what W&I policies typically won’t, being identified issues.

Therefore, this note explores the potential benefits of use of contingent insurance to realise your project’s full potential.