Warranty & Indemnity Insurance

VTS offers its clients a range of targeted client focused W&I insurance solutions that facilitate their specific corporate transactions.  VTS combines highly specialised product knowledge with a real commitment to innovation and service excellence to ensure clients’ needs are fully met in a timely manner.

W&I insurance provides a bespoke insurance-based solution to facilitate and support the successful completion of M&A transactions. Our W&I insurance policies are tailored for the transaction at hand.  Through the use of W&I insurance, buyers and sellers involved in a corporate transaction can effectively transfer transaction risk to the insurer.  This removes transaction roadblocks such as the need for an escrow retention account.  By working with and as part of the transaction team, we can provide specific and timely insurance solutions that can reduce or extinguish transaction risk, enabling otherwise challenging transactions to become a reality.

A W&I insurance policy provides insurance cover for financial losses arising from inaccuracies in warranties and indemnities. Where the buyer is the insured party this cover enables the buyer to claim against the insurance policy without the requirement to pursue recovery from the seller. Where the seller is the insured party, the insurance policy will reimburse the seller for financial loss suffered due to warranty and indemnity claims made against it.  W&I insurance policies are ‘claims-made’ policies and so they provide cover for policy claims made during the relevant period of the policy.

VTS policies are crafted to jigsaw with the unique requirements of the relevant transaction.  VTS will work with the insured to provide a policy that fits with the risk and recourse profile of the transaction such as mirroring liability expiry periods and retention thresholds that are included in the transaction sale agreement.

In addition to a more general W&I insurance offering, VTS also offers a suite of bespoke W&I insurance solutions that include:

Insurance Simplified

INSIM is a simplified W&I insurance policy using template documentation and predefined coverage to create a commoditised and standardised insurance solution for SME transactions.  This product enables insureds to obtain a more “off-the-shelf” solution.

Distressed Transactions

This product facilitates distressed transactions using synthetic warranties contained in the policy itself. This means a seller does not give the warranties directly but the buyer has the comfort of recourse for unidentified liabilities.  This is relevant for example where the seller is a funder who has enforced its security or an insolvency practitioner appointed to protect the creditors of a target.

Portfolio Build

For private equity funds who are in the build cycle of their fund’s life.  This product provides certainty of terms through a standardised policy appropriate for the nature of the fund and certainty of insurance capacity through ring-fencing of policy limit availability.

Secondary Funding

Product designed for funds who are in the recapitalisation cycle of their fund’s life seeking new and alternative investment.  Provides cover for non-operative warranties linked to title and authority of fund assets and investments.

Sell-side

For sellers who wish to mitigate the risk of financial loss due to a claim by a buyer.  This policy can be incepted before or after a transaction has signed and can assist sellers to distribute or utilise transaction proceeds (such as a fund being wound up) or where the buyer does not consider insurance to be part of its strategy.