Transactional risk insurance

We have created a policy to protect both parties in a transaction against financial losses arising from an unintentional and unknown breach of the seller’s warranties.

Chubb’s products can help maximise the value and returns of a deal, bridge the gaps that threaten deal closure, enhance a buyer’s bid in competitive auctions, and cover a seller for innocent misstatements.

Our underwriters have significant expertise in the sector gained from their years of underwriting and legal experience.

Using the extensive Chubb global network, we provide cover for deals all over the world, and where necessary link to our dedicated team in the US.

As part of a wider team, we also provide access to the full range of insurance solutions from Chubb, many of which can help with the insurance requirements that are triggered by a deal including:

• Contingent tax indemnity insurance
• Contingent liability insurance

Chubb’s W&I insurance covers losses arising from either unintentional or unknown breach of warranties and we cover the costs associated with defending any claims. The warranties apply to all aspects of a business, including:

• Company structure and share capital 
• Accounts (audited and management)
• Assets (owned by the company)
• Material contracts (in force and valid)
• Insurance (existing policies)
• Employment matters (employees and remuneration)
• Real estate
• Compliance
• IT and intellectual property
• Tax

We provide distinct cover for either buyers or sellers, and we tailor the policy to each individual deal.

We underwrite both UK-based and international businesses, servicing them through our network of local offices and the London wholesale broker network.

We offer policy limits of up to US$50m/£35m/€50m per risk.

Additionally we provide specific liability cover for clients looking to mitigate known contingent risks including tax exposure, litigation exposure, infringement of intellectual property or employment issues and disputes.

To consider a risk, we’ll need to know:

• Transaction information about the target, the seller and the buyer
• Background to the deal, including rationale, auction process and value

Documentation relating to:

• Information memorandum
• Accounts and management accounts
• Share Purchase Agreement
• Tax deed
• Disclosure letter
• Due diligence report
• Data room access

• Facilitates transactions where there is a gap in commercial expectations or negotiations
• Differentiates the buyer in a competitive auction process
• Protection against the collectability or solvency risk from a seller’s unsecured liability

• Facilitates transactions where there is a gap in commercial expectations or negotiations
• Quicker access to sale funds
• Individual sellers can protect themselves against default by other

• Warranties and indemnities insurance factsheet