Representations and Warranties Insurance
Professional
XL Catlin offers mergers and acquisitions insurance for risks associated with mergers and acquisitions, divestitures, spinoffs, private equity investments and other commercial transactions. Our global M&A solutions include representations and warranties insurance, contingent liability insurance and tax liability/tax opinion insurance products.

Product details

Representations and Warranties Insurance helps protect either buyers or sellers from losses associated with executing corporate M&A transactions. Our coverage is tailored to each unique transaction to protect insured parties from breaches of the various representations and warranties that are provided in a purchase agreement and are unknown at the time a deal is consummated.

Capacity

Up to USD 50 million

Client Profiles

Potential Insureds

  • Private equity firms
  • Multinational companies
  • Large strategic acquirers
  • Family-owned businesses
  • Selling shareholders
  • Private companies
  • Hedge funds
  • Company founders

Additional Product Beneficiaries

  • Law firms
  • Consultants
  • Other mergers and acquisitions advisors

Product Benefits

Representations and Warranties Insurance provides buyers with:

  • Competitive advantage in bid/auction processes
  • Added protection above any negotiated indemnity cap
  • Longer survival period for indemnification resulting from breaches
  • Protection against collectability or solvency risk of an unsecured indemnitor

Representations and Warranties Insurance provides sellers with:

  • Cleaner exits by reducing escrows or purchase price holdbacks and enhancing returns on sellers’ capital
  • Alternative recourse to shareholders in take-private transactions
  • Protection from financial loss resulting from representation and warranty indemnity claims

Why Choose XL Catlin

  • Dedicated and experienced underwriting team with extensive legal and transactional experience
  • Focused on maximum efficiency for fast and certain deal execution
  • Supported by dedicated in-house M&A Insurance Claims team
  • Fully integrated global capacity and ability to execute on cross-border transactions
  • Ability to collaborate with other product teams (e.g. cyber-security, environmental, products liability and construction) to provide comprehensive and seamless insurance solutions

Typical Submission Information Required

To obtain a quote, please provide a detailed description of the subject transaction including:

  • Financial information and/or the most recent annual audit of the target company being sold;
  • Draft Purchase/Sale or Merger Agreement;
  • Confidential Information Memorandum and/or Seller’s Management Presentation;
  • Signed Term Sheet/LOI, if available;
  • Details of the proposed policy holder, including the requested limit and retention amount sought; and
  • Any other relevant information or due diligence materials.

Please send all coverage requests to the M&A Insurance team mailbox: MergersandAcquisitionsInsurance@xlcatlin.com.

Typical Retention Structure

  • Comprised partially of the Buyer’s deductible and/or the Seller’s indemnity escrow (as set forth in the Purchase/Sale or Merger Agreement)
  • Typically between 1-3% of the deal’s enterprise value
  • Retention drop-downs after 12-24 months can be provided upon request

Minimum Premium

USD 200,000

Information and Research

Mergers and Acquisitions_Product Sheet_XL Catlin_US

This general product description is informational only. It is neither an offer to sell nor a solicitation to purchase any particular insurance product. Products are subject to legal and underwriting requirements. Coverages may not be available in all jurisdictions, including without limitation any jurisdiction within the United States, and may be available only through appropriately licensed producers. In addition, GAPS’s provision of publications or services is not an indication of the existence or availability under any policy of coverage for any particular property or type of loss or damage. Policies underwritten from Bermuda, Brazil, Canada, China, Mexico, Switzerland, or written by XL Insurance Company SE are only available through non US-based brokers. The Insurance companies of XL Group Ltd are: Catlin Insurance Company, Inc., Catlin Indemnity Company, Catlin Specialty Insurance Company, Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company, XL Bermuda Ltd, XL Insurance Company SE, XL Insurance Switzerland Ltd, XL Insurance (China) Company Limited, XL Seguros Brasil S.A. and XL Insurance Mexico SA de CV. Coverages placed with Lloyd’s Syndicate #2003 are managed by Catlin Underwriting Agencies Limited and supported by XL Catlin corporate capital. Additional important information regarding our business is provided on our Legal Notices page.

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