[Lindsey LeClair]

I was inspired by another post made six months ago regarding transaction insurance. There were no responses to the thread so I’m going to try again because I’m very interested in the group’s opinion.

Reps and warranties insurance – are you pro or con?

I am reluctantly Pro reps and warranties insurance, having had the opportunity to rely on said insurance previously.

[A.L.]

Speaking from perspective of Vendor organisation that divested a subsidiary and no longer following that particular business and industry, I would be pro reps and warranties insurance. The policy gave the organisation management some peace of mind as it moved on to other businesses. Given that the warranty period covers up to 5 years, the ability of the organisation to address any disputes effectively in future may be eroded as expertise on the divested business within the organisation is lost.

[Michelle Kime]

I work in private equity, and we always invest in R&W insurance when doing a deal. It’s very expensive to do a deal, and not possible to look under every rock during diligence. The insurance helps us to minimize our downside in the risk we take by investing in a business.

[Author]

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