In the sale of a business involving the sale of shares or assets, the seller usually provides warranties to the buyer for a broad range of issues such as title to shares, financial statements, tax, property, employment, intellectual property and other commercial matters. If the warranty is not accurate, it is said to have been breached, and a buyer suffering a loss as a result of that breach may be entitled to damages from the seller.
Warranty and indemnity (W&I) insurance provides protection to either the seller or the buyer against loss arising from breach of warranty/call on indemnity given by the seller.
Our team has the ability and authority to offer swift solutions for our clients seeking W&I insurance cover.
At a glance:
- US$25m capacity on either a primary or excess basis
- Can be bought by the seller or the buyer
- Can be bought at any time, even after completion
- Buyer benefits:
- a transaction tool, not just a source of recovery
- insures against loss arising from breach of warranty/call on indemnity
- can claim directly under the policy; no need to pursue the seller
- Seller benefits:
- may cover both defence costs and damages
- covers reasonable warranties
- effectively replaces seller’s obligations under the sale contract.