Representation & Warranty Insurance (RWI) is a useful tool to mitigate losses stemming from unknown issues that may arise subsequent to an M&A transaction.
VALE’s RWI product is a custom insurance policy that provides protection to buyers or sellers against losses arising from the breach of a representation or warranty made in the purchase agreement of an M&A transaction.
We tailor each policy to insure the specific risks related to the underlying transaction at hand. Coverage can be customized for even the most complex transactions.
Our underwriting team has the flexibility to arrange RWI solutions for M&A transactions across many different industries, deal sizes, and structures.
All claims are handled by the underwriting insurance carrier. Please refer to your policy on how best to submit a claim or obtain a claim status.
VALE underwrites RWI policies on behalf of an S&P A+ rated insurance carrier
- $50 million per Policy Limit
- Transaction values from $20 million to >$2 billion
- Focus on insuring U.S.-based entities
Benefits to Sellers
- Reduces or eliminates the need for a specific indemnity
- Increases certainty of sale proceeds
- Eliminates ongoing liabilities and indemnities
Benefits to Buyers
- Defines maximum exposure for identified tax issues
- Assurance of a credit-worthy payor if tax position successfully challenged
- Effective risk management tool for corporate governance
What is Rep & Warranty Insurance (RWI)?
RWI, also referred to as Warranty & Indemnity Insurance, is a form of coverage designed to guarantee the contractual representations made by sellers associated with corporate mergers and acquisitions.
What are the main benefits of such a policy?
VALE’s RWI policies provide a viable alternative to sellers’ indemnity escrows, which have typically been used to pay losses associated with the disclosure process during an M&A transaction.
Is VALE a retailer?
No. VALE is a managing general underwriter and works through licensed agents and brokers representing the buyer and/or seller on a business transaction.
How can I learn more about VALE’s Rep & Warranty Insurance product?
You can reach us in our offices at 212-247-6160 or feel free to drop us an email at RWsubmissions@valeip.com. We’d be happy to answer your questions.