The underlying loss typically covered by the W&I policy is the loss resulting from an inaccuracy of the warranties and indemnities relating to the acquired company or the acquired business.
In most transactions, one of the most heavily negotiated sections of the acquisition agreement is the section setting forth the warranties and indemnities relating to the acquired company or the acquired business. These warranties provide critical information to the buyer about the company or business it is acquiring and lay the groundwork for indemnification in the event the company or the business is not what the seller purported it to be.
As these warranties have the effect of allocating a great deal of risk in a transaction, most applicants for W&I insurance request coverage for all or some of these warranties and indemnities.
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Phone
Australia Wide: 1300 030 886
International: +61 3 9522 4000
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New South Wales
Head Office
Level 19
2 Park Street
Sydney
New South Wales 2000
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Victoria
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717 Bourke Street
Docklands
Victoria 3008
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Queensland
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Brisbane
Queensland 4000
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Western Australia
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108 St Georges Terrace
Perth
Western Australia 6000
Warranty and Indemnity Insurance
Warranty & indemnity insurance (W&I) helps protect a seller or buyer from financial loss resulting from inaccuracies in the representations and warranties provided by the seller as part of an acquisition or sale of a company or a business. Since the transaction documentation and process will vary depending upon the nature of a particular transaction, each W&I policy is tailored to address the unique requirements of each transaction.
Either a seller or buyer of a business can be the named as the insured under a W&I policy. The policy can also be extended to cover other parties, including a 'newco', a SPV or a guarantor. Determining whether a 'seller-side' policy or a 'buyer-side' policy is most appropriate for a particular transaction depends upon what the parties wish to achieve from the insurance (e.g. what is the 'driver' for the insurance?).
Accordingly, we recommend that in conjunction with their advisers, clients first consider how the insurance can be used to enhance the transaction. This should also include a consultation with our Mergers and Acquisitions (M&A) Insurance Group or your insurance broker at an early stage in the transaction, so that an informed decision may be made regarding the appropriate form of cover.
For more information on Warranty and Indemnity insurance from Chartis see the Product Brochures.
Since early 2000 we have been offering specialised Warranty and Indemnity policies for Australian and New Zealand companies involved in mergers, acquisitions and divestments. Our Mergers and Acquisitions (M&A) Insurance Group is recognised by M&A practitioners globally as an innovator in the field of applying insurance capital to enhance and facilitate transactions.
You can be sure that you have a dedicated partner in Chartis. We are focused on servicing your insurance needs today and anticipating tomorrow’s. We aim for each client relationship to be a true partnership and will take on your challenges as if they were our own. By meeting straightforward needs as well as solving complex issues, we make your confidence our number one priority.
Chartis is a world leading property-casualty and general insurance organisation serving more than 70 million clients around the world. With one of the industry's most extensive ranges of products and services, deep claims expertise and excellent financial strength, Chartis enables its commercial and personal insurance clients alike to manage virtually any risk with confidence.