Companies involved in a purchase and sale, asset, or share transaction—either on the buyer or seller side—face exposure to significant financial risk arising from the breach of a representation or warranty.
Mergers & acquisitions/transactional risk insurance provides peace of mind for such exposure, and can be purchased by either the buyer or seller.
For the buyer side, benefits can include:
- Protecting the buyer from a seller’s breach of a representation or warranty
- Reducing the indemnity required by the seller
- Providing for extended duration of the representations and warranties
For the seller side, benefits can include:
- Protecting the seller from losses arising from an alleged breach
- Reducing the amount of required indemnity
- Protecting the seller from an unintentional breach of a representation and warranty