Representations & Warranties Insurance
Business and asset buyers rely on the representations and warranties made by sellers regarding a target company or assets in an acquisition agreement. Sometimes sellers get it wrong – such as by providing an inaccurate representation or failing to disclose an item that would qualify the representation, causing the representations and warranties to be untrue or inaccurate, or a “breach."
Representations & warranties insurance (or “RWI”) protects buyers by making them whole for the losses that result from these types of breaches. Under these policies, buyer recourse is to the RWI insurer, not to a seller indemnity or escrow, making it easier and more efficient to get the deal done in the first place.
RWI (known as warranty & indemnity, or W&I, insurance outside of North America) to buyers seeking coverage for losses (including legal costs) resulting from a breach of a seller representation or warranty made in transaction documentation.
Palisade management has decades of experience underwriting contingent risks, including RWI coverage, in multiple jurisdictions on 6 continents. This experience gives Palisade the ability to write RWI coverage across all sectors, transaction structures and business types. RWI can be used in a broad variety of transactions and situations outside its traditional application to private company sales, including:
- Private Equity Secondary Transactions
- Public Company M&A (including de-SPAC Mergers)
- Private Equity Fund Liquidation or Wind-Up Situations
- Distressed company or asset sales, including 363 sales and Article 9 transfers
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