Representations & Warranties Insurance

Representations & Warranties Insurance (RWI) (Warranty & Indemnity Insurance outside of the U.S.) is a specialized insurance solution designed to protect buyers and sellers in mergers and acquisitions from financial loss arising from breaches of representations and warranties made in the acquisition agreement. …RWI provides critical coverage if a statement made about the business—such as those concerning the accuracy of financial information, regulatory compliance, or ownership—turns out to be inaccurate. For buyers, it offers strong protection from credit-worthy insurance companies against unforeseen liabilities, extends the survival period in which to make an indemnity claim, and often broadens the scope of the representations themselves. For sellers, it significantly limits or eliminates entirely the need for large indemnity holdbacks and escrows. For both parties to a transaction, RWI serves as a powerful deal facilitation tool, eliminating the need for costly indemnification negotiations, bridging certain valuation gaps and preserving key relationships post-closing.