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Representations And Warranties Insurance

Professional
AXA XL Insurance 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 60 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 AXA

  • 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@axaxl.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 175,000

Information and Research

Mergers and Acquisitions_Product Sheet_XL Catlin_US

The information contained herein is intended for informational purposes only. It’s is neither an offer to sell nor a solicitation to purchase any particular insurance product. Insurance coverage in any particular case will depend upon the type of policy in effect, the terms, conditions and exclusions in any such policy, and the facts of each unique situation. No representation is made that any specific insurance coverage would apply in the circumstances outlined herein. Please refer to the individual policy forms for specific coverage details. AXA XL is a division of AXA Group providing products and services through four business groups: AXA XL Insurance, AXA XL Reinsurance, AXA XL Art & Lifestyle and AXA XL Risk Consulting. In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA Group. Not all of the insurers do business in all jurisdictions nor is coverage available in all jurisdictions.

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