The following is a Q&A interview with Akerman’s David Birke, co-chair of the firm’s M&A and private equity practice, and Craig Warnke, a managing director in Marsh’s transactional risk practice. The interview outlines the surge in interest in and utilization of representations & warranties insurance over the past few years, factors in deciding which of the burgeoning number of insurers to select, and the increased breadth of coverage available. Also discussed are other considerations of which prospective insureds should be aware before purchasing these increasingly important policies for their transactions.
David Birke (Akerman): Less than 10 years ago, some buyers offered representation & warranty policies to try to gain a competitive advantage in an auction process—or sellers might purchase a sell-side policy. Now it seems as though every seller expects the buyer to purchase a buy-side R&W policy. What percentage of middle-market deals use a buy-side R&W policy as the primary source of indemnity?
