Market Conditions 2018 - Representations and Warranties Insurance

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Representations and Warranties (R&W) insurance was designed nearly twenty years ago to provide insurance coverage for breaches of representations and warranties by the seller in a purchase agreement. A relatively obscure product with fluctuating popularity until 2011, policy placement in mergers and acquisitions (M&A) transactions continues to increase significantly each year as buyers, sellers and their outside counsel have become more comfortable using the product to supplement or even replace seller indemnity obligations by insuring all (or most) of the representations made within the purchase agreement. In fact, many deal attorneys now believe that R&W insurance is no longer optional.