The allocation of risks and liabilities between the parties in a merger or acquisition is one of the most fundamental and difficult aspects of any transaction. Traditionally, the accuracy of a seller’s representations and warranties have been backstopped 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 Insurance). 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.
Several insurance solutions exist to help address both known and unknown issues, including:
Remediation Cost Cap insurance
These policies insure known conditions, and cost overruns of a specific remedial plan.
Environmental or Pollution Liability insurance
These policies provide coverage of remediation costs associated with unknown pollution conditions at specific sites, along with third-party bodily injury and property damage.
Owens Group has the expertise to help you assess existing and potential risks, and provide comprehensive protection for your company.