AT A GLANCE
Start with the transaction
A useful W&I presentation should identify the buyer and seller, target business, enterprise value, transaction structure, governing law, SPA status, warranty package, tax indemnity, disclosure process, due-diligence workstreams, known issues and expected signing or completion timetable.
W&I insurance is transaction-specific. The quality and scope of due diligence, disclosure and the exact warranties and indemnities in the transaction documents are central to the underwriting process.
TRANSACTION INFORMATION
Information commonly needed
- Buyer, seller, target and transaction structure.
- Enterprise value, signing/completion timetable and governing law.
- Draft or agreed SPA, warranty schedule and tax indemnity.
- Legal, financial, tax and other material due-diligence reports.
- Disclosure letter/data-room position and identified known issues.
- Desired policy limit, retention and any particular areas of concern.
DUE DILIGENCE
Why diligence matters
W&I underwriting commonly tests whether material warranty areas have been investigated to a depth proportionate to the transaction. Gaps, exclusions or issues identified in diligence may affect what can be insured.
Known matters are often treated differently from unknown breaches. Specific tax, contingent-liability, title or environmental risks may require separate consideration rather than being assumed to sit within ordinary W&I cover.
QUESTIONS
Questions to resolve before approaching the market
What documents should be ready?
Commonly useful documents include the SPA, warranty schedule, disclosure materials and material due-diligence reports.
Why do known issues matter?
W&I insurance is generally intended to address unknown breaches rather than matters already identified by the insured. Known issues may need a different risk-transfer solution.
Why does the due-diligence scope matter?
The insurer needs to understand how thoroughly the buyer or insured has investigated the areas covered by the warranties.
For wider preparation, see the DIBNI Commercial Insurance Proposal Guide.