14 Mar 2023
Market Standards: Prevalence of Representations and Warranties Insurance in 2022
Representation and warranties (R&W) insurance is usually discussed during the earliest stages of negotiation of private target deals. R&W insurance has the effect of shifting the risk of claims arising from breaches of seller reps and warranties from the seller to the insurance policy. This reallocation of risk affords the buyer an opportunity for broader seller reps and less time negotiating reps and warranties.
The prevalence of R&W insurance referenced in private target transactions valued at $25 million or more in 2022 decreased as compared to 2021 and 2020. Based on a Market Standards survey of 343 private target deals announced in 2022, 27% of those deals referenced R&W Insurance as compared to 35% of similar deals surveyed in 2021 and 34% in 2020. The number of transactions for which R&W insurance policies are obtained is likely underrepresented as many transactions capture the terms of such policies outside of the acquisition agreement and the policy is secured early in the deal process.
Market Standards is a powerful tool for researching and comparing over 38,000 M&A transactions from 2008 to the present. Leverage Market Standards to find on-point precedent language on the most highly negotiated transactions with over 150+ M&A deal points. To learn more about how it can help M&A attorneys work more efficiently, click here.
Discover Emerging Trends in M&A Transactions
To learn more about strategic uses of R&W insurance policies click below.
Related Content
- Stock Purchase Agreement (Representations and Warranties Insurance) (Pro-Buyer) (DE)
Look to this template for useful provisions and drafting notes relevant to acquisition agreements including R&W insurance.
- Market Trends 2021: Representations and Warranties Insurance
Take a more in depth look at the R&W insurance market trend for private target transactions valued over $25 million announced in 2021.
- Representations and Warranties Insurance Drafting and Counseling Considerations
Explore the drafting and counseling considerations before diving into your next acquisition agreement.
Practical Guidance Updates
Featuring the latest updates from your Practical Guidance account.
- Check out the new Practical Guidance Author Center! Learn about the 1750+ leading attorney authors contributing to our 22 practice areas, and find out how you can Become a Practical Guidance Author.
- Legal Developments provide the latest updates and analyses of emerging topics impacting your practice area. Visit the Legal Developments page to see the latest topics, which also include breaking legal news and related Practical Guidance content.
- Document alerts allow you to stay current on legal developments that affect your practice. Find out how to set up your document alerts.
Experience results today with practical guidance, legal research, and data-driven insights—all in one place.
Experience Lexis+