Key Issues to Consider When Allocating M&A Transaction Risk

Due to falling costs, quicker and more efficient underwriting, and improving policy terms, M&A Insurance, also known as Transactional Insurance, has risen in popularity as a tool to allocate deal risk in M&A deals of varying types and sizes, and especially with respect  to private-target M&A transactions. Consequently, we are publishing this update to our Transactional Insurance Guidebook to aid deal practitioners in utilizing various forms of Transactional Insurance, including Representations and Warranties Insurance (“RWI”) as well as specialized insurance policies that address risks excluded from RWI, such as risks associated with taxes, litigation and other contingent liabilities. This Transactional Insurance Guidebook:

  • provides an overview of the various types of transactional insurance,
  • compares the relative strengths of escrows and insurance in managing risks in M&A deals, and
  • discusses how escrows and insurance can be used together.

This guidebook is not meant to be exhaustive; rather, we hope that it serves as a concise and convenient reference guide to help you understand and use Transactional Insurance.

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