Programme Features
- Financial capacity of up to US$70 million (€70 million / £50 million / AU$85 million / CHF 70 million) per TRI policy
- Primary or excess
Best For
- Companies involved in a mergers and acquisitions transaction
- Category: Transaction Risk
- Industry: Energy, Private Equity, Construction & Real Estate, Financial Institutions, Aerospace, Media & Technology
- Group: International Group
Transaction risk insurance (TRI) products are often employed to effectively bridge a gap between the deal parties’ positions (typically between buyer and seller) and at times can even enhance them. Mergers and acquisitions between companies come with a great deal of risk to both the purchasing and selling organisations. Warranty and indemnity (W&I) insurance provides significant advantages to both parties to safeguard against a loss from breach of warranty or a misrepresentation on behalf of the seller or to provide a strategic tool for buyers to gain a competitive edge against other bidders.
Summary of Coverage
Warranty and indemnity (W&I) insurance programmes facilitate the sale and purchase process. Both buyer-side and seller-side policies are available, and the policy is structured to meet the risk retention and recourse requirements of the deal parties.
W&I insurance provides a convenient solution to both buyers and sellers, and presents significant advantages, such as:
- A commercially viable alternative to security traditionally sought through costlier and less satisfactory means (such as an escrow account, bank guarantee or letter of credit)
- A simpler and more effective method of seeking indemnity against a loss resulting from a breach of warranty or tax deed / covenant in a sale and purchase agreement
- A tool to mitigate the vendor's risk for liabilities arising from innocent misrepresentations made by the vendor
- Coverage, afforded to the buyer, for any financial loss as a result of any misrepresentations (innocent or otherwise) made by the vendor
- A strategic tool to give the buyer a competitive edge against other bidders for the purchase or to make the vendor's offer more appealing, as the risk is transferred to a financially sound insurer
TRI Team Advantage
Our Financial Lines team includes a dedicated team of TRI specialists made up of underwriting, claims and legal professionals. The team's extensive experience and in-depth knowledge of worldwide transaction risk related issues, coupled with our "under one roof" strategy, ensure a high level of professionalism with fast and efficient service. Being internationally focused means we can offer tailor-made policy wordings in many languages and for multiple jurisdictions.
About the Financial Lines & Transaction Risk Team
Our centralised and unified management structure promotes real-time interaction between our transnational teams of underwriting, claims and legal professionals. The fact that our assets are consolidated under “one roof” makes us institutionally quick: quick to respond and to provide intelligent advice, innovative solutions and efficient claims handling.
For all international insurance and reinsurance business, we underwrite on behalf of the following affiliated insurance companies:
Tokio Marine Europe S.A.
Direct insurance and Facultative reinsurance.
HCC International Insurance Company plc
Direct insurance and Facultative reinsurance.
HCC Underwriting Agency (Lloyd's syndicate 4141)
Direct insurance and Facultative reinsurance.
To find out more about our affiliated insurance companies, please click here.
