Despite the key role that a target company’s underlying insurance plays in representations and warranties insurance (RWI), insurance due diligence is not always well understood, often relegated to five minutes on the underwriting call and lacking the detail typically seen in other specialist areas. To help underwriters better understand underlying insurance policies and the critical role that other underlying insurance plays in deals utilizing representations and warranties insurance, Josh Warren, ABD’s M&A Advisory Practice Leader joined Seyfarth’s Bryan O’Keefe and Gena B. Usenheimer on their podcast, Into the Breach.
Together, they discussed the following topics:
- How RWI underwriters can assess the risk associated with the target company’s underlying insurance policies.
- An explanation of prior bad acts coverage and tail policies.
- In what circumstances underlying insurers will — and will not — waive change in control provisions.
- What is really meant to sit “excess of and no broader than” the underlying insurance and the pros and cons of using this approach to limit RWI risk.
- How other specialty insurance products — successor liability, discontinued products — can be used in tandem with RWI to achieve positive outcomes for insured and insurers alike.
- Guidelines on assessing coverage limits in common underlying insurance, such as cyber insurance.
Click here to listen to the full podcast episode, also available on Spotify, Apple Podcasts, and Google Podcasts. To learn more about our work with reps and warranties insurance, visit our M&A Advisory page.