Transactional (W&I) Risk Insurance

Transactional, or Warranty & Indemnity (W&I) Insurance, is designed for mergers and acquisitions (M&A) to protect against financial loss arising from breaches of warranties or representations made during the transaction process. It can also serve as an alternative to escrow requirements, enabling a smoother and faster deal closure. Both buyers and sellers can take out this coverage to protect their respective interests.

In M&A transactions, even well-structured deals carry the risk of unexpected liabilities. W&I Insurance can help overcome obstacles in negotiations, facilitate agreement between parties, and reduce the need for significant funds to be tied up in escrow. It ensures financial protection if post-transaction claims are made, safeguarding the deal’s value and allowing both parties to focus on integration and growth.

W&I Insurance is suited for:

• Buyers seeking protection from breaches of warranties or indemnities
• Sellers wanting to limit post-transaction liability and secure a clean exit
• Private equity firms and corporate investors involved in acquisitions or divestments

• Breach of warranties and indemnities under the Sale Purchase Agreement (SPA)
• Seller-side cover for certain losses if the buyer makes a claim
• Buyer-side cover for financial losses from undisclosed liabilities
• Alternative to escrow deposits, freeing up capital for other uses

At Advisio, we work closely with both local and international insurers to structure W&I coverage that aligns with the specific requirements of your transaction. Our experience in supporting complex M&A deals enables us to identify and address key risk areas, ensuring your deal moves forward with confidence and financial security.