The AIG Building

Warranty and Indemnity Insurance

Overview: Also known as Representations and Warranties Insurance. Responds to cover financial losses arising from breaches of any warranties, and in certain jurisdictions tax indemnities, provided to facilitate a variety of corporate transactions, especially mergers and acquisitions.
Cover: Transfer of liability for breaches of warranties and indemnities under the acquisition agreement and tax warranties.
Who is it for?:  Any company considering a merger or acquisition.

  • The policy, whether seller-side or buyer-side, will indemnify the insured for loss resulting from a breach of warranty or tax deed/covenant in a Sale and Purchase Agreement (SPA).
  • A seller-side policy covers the seller for its own innocent misrepresentations; a buyer-side policy covers the buyer against the seller’s misrepresentations (innocent or otherwise). The buyer claims directly against the insurance policy and does not have to seek recourse against the seller.