Warranty and Indemnity (W&I) insurance in private M&A transactions—guide to the key documents
Produced in partnership with Adrian Furlonge of Hemsley Wynne Furlonge LLP

The following Insurance & Reinsurance practice note produced in partnership with Adrian Furlonge of Hemsley Wynne Furlonge LLP provides comprehensive and up to date legal information covering:

  • Warranty and Indemnity (W&I) insurance in private M&A transactions—guide to the key documents
  • W&I insurance documents
  • Confidentiality undertakings and non-reliance letters
  • Broker’s NBI report
  • Engagement with W&I insurers
  • Engagement stage
  • Due diligence reports
  • Underwriting questions and underwriting call
  • Negotiating a W&I insurance policy
  • Key W&I insurance definitions
  • More...

Warranty and Indemnity (W&I) insurance in private M&A transactions—guide to the key documents

With the significant rise in the use of Warranty and Indemnity (W&I) insurance in private M&A transactions, lawyers are increasingly involved in the stipulation and negotiation of W&I insurance policies.

Although the process of structuring and implementing an insurance policy is always tailored to the specific requirements of each deal, the basic structure of the process is similar for all transactions.

Against this background, this Practice Note provides guidance for legal professionals in relation to the procurement and negotiation of W&I insurance (the Placing Process) with a particular focus on the documents that are exchanged between W&I insurance brokers and insurers and which must be executed by the insured before the W&I insurance policy incepts.

W&I insurance documents

Confidentiality undertakings and non-reliance letters

The following are standard requirements:

  1. execution of a confidentiality undertaking or non-disclosure agreement (NDA). The W&I insurance broker (Broker) will normally share with the client (or the client’s advisors) a draft NDA in a form that has been pre-agreed with the W&I insurers.

    It is usually more efficient to enter into an agreement based on this draft than it is to seek the insurers’ agreement to an NDA that is back to back with the NDA that applies to the transaction generally. To attempt this can cause avoidable and protracted negotiations with insurers because the

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