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  • Helps protect either buyers or sellers in private company transactions from financial loss in the event of a breach of representations and warranties (R&W) made by the sellers
  • Deal size: $25M to approximately $4B
  • Available limits up to $100M for any single transaction
  • Minimum premium of $150K
  • Retention typically 1.0% of the enterprise value, dropping to 0.5% after 12 months
  • Coverage available for risks on a 100%, shared, layered or excess basis from AIG’s non-admitted carriers only
  • No particular industry or sector bias; we can underwrite deals in most industries and sectors

Key Advantages for Buyers

Key Advantages for Sellers

Enhances protection for breaches of R&Ws, supplementing the indemnification provided by the sellers, if any

Helps allow for distribution of all or most of the sale proceeds to investors or uses proceeds to pay down existing debt (seller doesn’t have to keep sale proceeds in escrow)

Extends the duration of R&Ws, affording buyers additional time to detect and report problems that may exist with the acquired business

Reduces risk of contingent liabilities arising from future R&W claims, allowing sellers to lock in their return on investment and cleanly exit a business or industry

Can distinguish a bid in a competitive auction by reducing or eliminating seller’s escrow requirement, without sacrificing indemnification coverage

Helps protect passive sellers with limited involvement or management oversight from unintentional non-disclosures or breaches

Helps protect relationships with seller-side stakeholders who may become the buyers’ key employees or commercial business partners after closing

Helps expedite a sale and potentially increases purchase price by eliminating obstacles to closing, such as indemnity negotiations

Eases concerns over the ability to collect on sellers’ indemnification regardless of financial condition or other practical considerations (e.g., sellers may be numerous, geographically dispersed or difficult to locate)

 

Claims

Dedicated and experienced claims team specialized in disputes surrounding complex transactions and in processing customer claims in an expedient manner with proven claims paying ability

 

Underwriting

 

Underwriting and industry expertise to craft the tailored programs each structured transaction requires

 

Global Capacity

 

Lead line capacity backed by one of the global networks in the industry, spanning 215+ countries and jurisdictions, to deliver multinational capabilities