Business Litigation Reporter - April 2017

Goodwin
Contact

Representations and Warranties Insurance Policies – Lessons from the Claims Process -

Representations and warranties insurance policies (R&WI Policies)—designed to protect parties from loss arising from breaches of representations and warranties in corporate deals—are not a new phenomenon; they were introduced in the marketplace over 15 years ago. But the popularity of R&WI Policies has expanded dramatically in recent years and, with it, the frequency of claims submitted under such policies. The growing volume of claims experience under R&WI Policies has confirmed their significant value to acquiring and selling businesses alike. That experience also has revealed, however, certain key lessons that companies shopping for or making claims under R&WI Policies should keep in mind throughout the process.

Background -

First offered in 1999, R&WI Policies are generally intended to provide coverage for breaches of representations and warranties made by the seller (or acquired entity) in a purchase agreement. These policies serve as either a supplement to, or in some instances a substitute for, the sellers’ obligations to maintain a portion of the transaction price in escrow to ensure that funds are available to indemnify the buyers in the event of a breach. Although coverage is available for both buyers and sellers, the vast majority of R&WI Policies underwritten are buyer-side policies in which the acquiring company or its affiliate is the named insured.

Please see full publication below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Goodwin | Attorney Advertising

Written by:

Goodwin
Contact
more
less

Goodwin on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide