Representations & Warranties Liability

Honoring Your Agreements

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The allocation of risks and liabilities between the parties in a merger or acquisition is one of the most basic and difficult aspects of any transaction. Traditionally, the accuracy of a seller’s representations and warranties have been secured by an escrow, which is often highly inefficient, and can unnecessarily tie up money and resources for years. The insurance industry has developed an alternative solution: Representations and Warranties Liability Insurance (R&W). R&W insurance protects the insured against unintentional and unknown breaches of a seller’s representations and warranties in a purchase agreement. It can also free up cash that previously languished in escrow.