Representations and Warranty Insurance – To Insure or Not to Insure

Business man navigating a maze
Buyers in today's seller-friendly M&A environment are increasingly faced with the choice to insure using Reps & Warranties insurance or to self-insure and accept all post-closing risk. Determining the optimal path forward is not always clear as each transaction is unique.  Global Private Equity Watch presents several considerations for buyers when facing this decision. See the compariso...
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Tax Issues in Rep and Warranty Insurance Deals

In a recent article published in Tax Notes, DLA Piper's Tom Geraghty, Michael Greenberg and John Wei addressed the tax treatment of indemnification payments made under a representation and warranty insurance policy and the costs for acquiring that insurance. They concluded that "indemnification payments made under an R&W insurance policy may sometimes result in income to the insured withou...
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Just Released: First Comprehensive Review of Representations & Warranties Insurance

Cover of Vanbridge's Reps & Warranties Insurance Market Report
Vanbridge LLC announced the release of the first US Representations and Warranties Insurance Market Report today, which provides a comprehensive review of the overall 2016 market for this product.  The scope of the report focuses on the submission and placement process in the US market, analyzing the size of the marketplace, pricing and trends. The vast majority of markets that wrote busine...
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The Hidden Dangers in No or Low Indemnity M&A Deals

Many M&A transactions now use R&W Insurance as a substitute for seller indemnity. This article briefly discusses considerations for M&A practitioners when confronted with R&W insurance exclusions. The following are some of the most common exclusions: Environmental (if Phase I’s or diligence evidences contamination); Employee matters such as wage & hour claims (typica...
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A Closer Look at Tax Insurance

Tax Insurance
As a follow-up to our blog post addressing the disconnect between reps & warranties policies and identified tax exposures in a transaction, a recently published Bloomberg article discusses the rapid growth and acceptance of tax insurance.  While most tax insurance programs involve some sort of transaction, they do not need to be tied to M&A. Similar to R&W, the product has been ...
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