Insurances

Our Insurance Solutions

We offer a wide range of M&A insurance solutions, such as Warranty & Indemnity (W&I), Tax Liability, Title, Contingent Risk, Environmental and Intellectual Property insurance.

Warranty and Indemnity (W&I) Insurance

also known as Reps & Warranties or M&A Insurance provides coverage for financial loss arising from a warranty breach or a claim under a tax indemnity in the purchase agreement of M&A transactions.  The policy protects against unknown risks or ‚innocent misrepresentations‘ that result in a loss.

Insured Party

Seller or Buyer.
It is common that the Seller initiates the W&I process, with the Buyer becoming the insured (so called “Seller-Buyer-Flip“).

Policy Period

up to 3 years for General Warranties
7-10 years for Tax Coverage
7-10 years for Title and Capacity Warranties

Premium

0.5% – 1.2% of the insured limit.
The premium is a one-off payment at inception of the policy.

Enhancements

It is possible to extend the coverage and liability regime in the policy independent from the purchase agreement by using enhancement tools.

Retention

Depending on industry and type of transaction, insurers offer retention options between nil and  0.5% of the enterprise value.

Tax Liability Insurance

covers (i) specific identified tax risks that are not coverable under Warranty & Indemnity (W&I) insurance policies, or (ii) other known low to medium tax risks irrespective of a transaction. This type of insurance is frequently used as an alternative to obtaining a binding tax ruling from tax authorities. It also helps companies to resolve tax reserves from their balance sheets. By transferring tax risks to an insurer, companies can mitigate uncertainties and improve financial flexibility while avoiding the lengthy process of obtaining a tax ruling.

Insured Party

Seller, Buyer or Target

Policy Period

Typically, equal to the time limitation in the jurisdiction where the tax risk would materialize. Usually, around 7 years up to 10 years.

Premium

1% – 7% of the insured limit, as  one-off payment at inception of the policy.

Insured Content

Financial loss, legal defense costs, interest, fines, penalties, gross-up and advance tax payments

Required Documents

(i) Description of the risk (ii) A legal opinion (on non-reliance basis)  which shows a likelihood of more than 50% that the risk will not materialize (iii) Assessment of potential loss

Title Insurance

offers protection against the financial loss of ownership risks, due to defects or failure of title related to property and/or the shares of entities. It covers risks such as undisclosed ownership claims or issues with the chain of title that could affect the buyer’s ownership rights. Title insurance can also provide coverage for specific identified public law risks, such as (i) missing deeds and documents or restitution and expropriation of land, breach of (ii) public procurement and tender rules, (iii) inheritance laws, (iv) financial loss resulting of challenges by third-parties to public-law permits.

Insured Party

Seller, Buyer, Target or Financing Parties

Policy Period

up to 10 years.
Coverage can be assigned to successors in the title or real property

Premium

0.1% – 0.3% of the insured limit as one-off payment at inception of the policy

Insured Content

financial loss resulting from ownership risks related to real property or title to shares or challenges of public law permits

Retention

Usually nil retention

Environmental Insurance

Environmental Liability Insurance offers protection against both known and unknown environmental risks, providing comprehensive insurance coverage for past and future pollution concerns.
Especially in M&A transactions which include manufacturing sites, Environmental Liability Insurance can bridge the gap of one of the most challenging points in SPA negotiations, as compromises regarding the uncertainty and unpredictability of risks stemming from historic environmental conditions are often hard to accomplish.

Insured Party

Seller, Buyer or Target

Policy Period

Up to 10 years.
Extensions are possible.

Premium

1% – 5% of the insured limit of liability.
The premium is a one-off payment at inception of the policy.

Insured Content

financial loss resulting from: (i) environmental clean-up, (ii) natural resource damage, (iii) bodily injury or property damages by third-parties, (iv) defense costs and (v) punitive damages and civil fines (if insurable by law)

Required documents

(i) Description of the risk, (ii) phase I or phase II environmental due diligence and (iii) location to be insured

Contingent Risk Insurance

is a tailored insurance solution that transfers a specific identified or contingent risk to an insurer’s balance sheet. It is an effective tool for overcoming deal-breakers in transactions. This approach helps mitigate uncertainties and facilitates smoother deal negotiations. Within a transaction it is known as Litigation Buy-out insurance, outside a transaction it is known as Litigation Defense Insurance.
Litigation Buy-out Insurance: Covers loss arising from ongoing litigation proceedings with the Target instead of a sellers’ indemnity.
Litigation Defense Insurance: Covers potential loss of the defendant in litigation proceedings and can be used to minimize contingent liabilities and legal costs on the balance sheet.

Insured Party

Seller, Buyer, Target or Successors of the risk.

Policy Period

up to 10 years

Premium

2% – 10% of the insured limit as one-off payment at inception of the policy.

Insured Content

Coverage will be tailored in a way that the policy responds to an adverse court or arbitration decision. It covers the loss awarded, defense costs and interest payments.

Required documents

(i) Description of the risk (ii) A legal opinion (on non-reliance basis)  which shows a likelihood of more than 50% that the risk will not materialize. (iii) Assessment of potential loss (iv) Case documents which show the case’s arguments, evidence, and procedural progress.

Intellectual Property Insurance

protects a company’s entire IP portfolio or specific products and services against financial loss arising from risks related to intellectual property rights. Compared to traditional Errors & Omissions (E&O) insurance policies, IP Insurance provides broader coverage for intellectual property claims. These policies are specifically designed to address the potentially catastrophic impact of an IP dispute. They can also be customized to cover a company’s IP indemnity obligation provided to customers, vendors, or other licensees, offering comprehensive protection in IP-related matters.

Insured Party

Seller, Buyer or IP Owner

Policy Period

A specified policy period aligned with the legal time limitations for the historic risk or a 1-year policy period with an annual renewal option providing ongoing coverage for both historic and future infringements

Premium

Starting with 0.5% of the insured limit as one-off payment at inception of the policy.

Insured Content

coverage for (i) financial loss resulting from potential IP infringements by third parties,  IP invalidation proceedings, contractual indemnification claims or the enforcement of IP claims (ii) defense costs, (iii) loss of profit

Required documents

(i) Description of the risk (ii) A legal opinion (on non-reliance basis)  which shows a likelihood of more than 50% that the risk will not materialize. (iii) Assessment of potential Loss (iv) Jurisdictions to be insured