Warranty & Indemnity Insurance
In connection with M&A transactions the buyer as well as the seller has strong interests in mitigating the risk of potential disputes, which may occur in the wake of an M&A transaction.
Often this risk is mitigated through insurance coverage of breaches of the warranties and representations in the SPA - a Warranty & Indemnity Insurance. W&I Insurances can be taken out both as buy-side and sell-side insurance, but are most frequently taken out by the buyer, partly for practical reasons and partly so that a possible fraud scenario on the part of the seller does not impede the insurance coverage.
In case of breach of the representations and warranties, which are insured under the W&I Insurance, indemnification will be sought against the insurance underwriter instead of the seller. The claims are often of great size and consists of high factual and legal complexity. At the same time high attention must be given to ensure that the relevant considerations applicable in the setting involving insurance companies are taken, including commercial interests.
Lundsgaard & Partnere assist insurance companies in relation to these insurance claims, which, due to the complexity and magnitude, require extremely careful handling. Lundsgaard & Partnere offer advice to insurance companies in this process and assist with the handling of the claims against the insurance company based on the office’s experience in disputes between buyers and sellers in M&A disputes, while benefiting from the team’s long-standing work as external lawyers for general insurance companies. If the insurer and the policyholder cannot agree on or settle the claim, the office assists with the necessary court or arbitration case.