RWI Explained: Safeguarding M&A Transactions

Representations and warranties insurance (RWI) is a specialized tool in private acquisition agreements, designed to cover losses from unknown breaches of a seller's representations and warranties. It serves three primary purposes: supplementing a buyer's indemnification limits, providing coverage in place of traditional indemnification, and backstopping a seller's escrow or indemnification obligations. Discover the essentials of RWI, including policy underwriting and claims handling, in this detailed practice note.

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Related Content

• Representations and Warranties Insurance Covenant Clause 
  Use this covenant to make sure the parties to your transaction cooperate in securing an RWI policy. 

• Representations and Warranties Insurance Underwriting Call Checklist 
  Refer to this helpful checklist when preparing for your next due diligence call with an insurer’s underwriting team. 

• Representations and Warranties Policy Selection Checklist
  Utilize this practical checklist to quickly ascertain the key differences between transactions with and without RWI involved.

• Stock Purchase Agreement (Representations and Warranties Insurance) (Pro-Buyer) (DE)
  Start your drafting with this complete stock purchase template, customized for deals involving RWI policies.

• Indemnification Clauses (Representations and Warranties Insurance)
  Have a base agreement already? Use this indemnification clause to properly account for RWI in your next deal.

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