Modern M&A Insurance
The use of insurance capital to help bridge gaps between buyer and seller, or enhance a bid in a competitive environment, has increased in popularity in today's M&A environment.
Transactional Risk Insurance
a Valuable Deal Solution
Warranties & Representation Insurance is a fast-growing mainstream solution to maximize your protection and minimize your risk in M&A transactions.
Maximize Your Protection and Minimize Your Risk with Vcheck
- Leading technology to provide faster turn around so your M&A deals are not delayed
- Nationwide and International Partners to support multi-region deals with ease
- Over 5,000 engagements for private equity firms and corporate acquisitive clients
Overview of Representations & Warranties Insurance
Protects against unanticipated seller’s breaches of representations and warranties and losses that may arise post-close.
Cover provided for all fundamental and non-fundamental Representations and Warranties.
Reduces or eliminates seller indemnity or escrow.
May be secured by a buyer or seller (“Buy Side” vs. “Sell Side”)
Can potentially provide additional protection over specified indemnities
Representations & warranties policies have been proven to be an affordable and smart solution to provide security in a deal as carriers have been willing to pay out on claims brought against the policy.
The use of insurance capital to help bridge gaps between buyer and seller, or enhance a bid in a competitive environment, has increased in popularity in today’s M&A environment. Representations & warranties insurance, in particular, has become a mainstream solution to overcome deal obstacles and increase protection for the buyer, seller, or both parties.
Vcheck offers industry specific solutions tailored to address your specific underwriting concerns.
Industry specific underwriting concerns
Uses of Rep and Warranties Insurance
Risk Management Uses
- Increase maximum indemnity / extend survival period for breaches of reps & warranties
- Ease collection concerns
- Provide recourse when no seller indemnity possible (public company sales, bankruptcy)
- Distinguish bid in auction
- Protect key relationships
Risk Management Uses
- Reduce contingent liabilities
- Distribute sale proceeds Protect passive sellers
- Attract best offers by maximizing indemnification
- Include R&W Insurance as the sole remedy in draft agreements in auctions
A representations & warranties policy can be purchased by either buyer or seller, to the benefit of, and without detriment to either party. This decision is made based upon the parties involved in the transaction and their specific needs. Frequently, a buyer may make the decision to purchase coverage for the seller, or vice versa.
Step1 – Non Bindable Indication Letter (NBIL)
Draft transaction agreement, financials, summary of target
Premium, Limit, Term, Deductible/Retention, and identified area of concerns
Step 2 – Underwriting/Audit of Due Diligence
Review of buy side due diligence reports, data room, memos
All Hands On Call
Review identified due diligence matters and underwriter questions
Follow Up Questions/Requests
Negotiation of policy form to ensure policy mirrors terms of agreement
Vcheck Risk M&A Professionals Are Here to Help