Warranty & Indemnity Insurance

Warranty & Indemnity (W&I) insurance has become an increasingly important tool for allocating warranty and indemnity risks in M&A transactions. Forgó, Damjanovic & Partners advises both buyers and sellers on the legal and transactional aspects of W&I insurance, drawing on our extensive experience in corporate/M&A transactions.

We assist clients throughout the W&I process, from the underwriting stage and responses to insurers’ questions through to reviewing and negotiating the policy and ensuring that its terms are consistent with the share purchase agreement and the agreed allocation of transaction risks. Our experience includes both international and domestic transactions.

Our W&I practice is closely integrated with our corporate/M&A practice. This enables us to assess the insurance policy in the context of the underlying transaction, due diligence findings and SPA provisions, and to identify and address potential gaps or inconsistencies between the insurance coverage and the contractual risk allocation.

Services

We advise clients on W&I insurance in M&A transactions, including:

advising on right implementation of W&I insurance in the transaction process
reviewing W&I insurance policies
advising on the interaction between W&I policies and share purchase agreements
ensuring consistency between the policy and the warranties and indemnities agreed in the transaction documentation
advising on the allocation of risks and the coordination between W&I insurance and contractual indemnities
assisting clients with the underwriting process, including responding to underwriting questions
advising on Hungary-related issues arising in international W&I transactions
assisting clients with negotiations with insurers

carrying out legal DD on behalf of W&I insurers

Contact

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Examples from our
track record

We acted as lead counsel to the sellers in an international transaction in the insurance sector, including responding to underwriting questions, reviewing and negotiating the W&I policy, and ensuring consistency with the SPA.

We acted as lead counsel to the sellers in an international transaction involving a parcel locker delivery business, including reviewing and negotiating the W&I policy and ensuring consistency with the SPA.

We acted as Hungarian local counsel to the buyer in an international transaction, including advising on and responding to Hungary-related underwriting questions.