Assessing the Value of Representations and Warranty insurance

During the past decade, it has become increasingly common for merger and acquisition transactions to include the purchase of representation and warranties insurance (RWI). Mergers and acquisitions typically involve parties making certain representations and warranties to each other about past or existing facts, These often are key components of a deal and can be heavily negotiated by the parties, who then rely on these statements as part of the basis for their decision to close.