Jurisdiction(s):
United Kingdom

Key definition

Warranty definition

What does Warranty mean? A warranty is a contractual promise that specified facts are true or that goods or services will meet stated standards. Lawyers use warranties to allocate risk and support due diligence, commonly in sale of goods, supply, real estate and M&A/share purchase agreements. In sale of goods law, “warranty” is defined by statute: Sale of Goods Act 1979 (England & Wales, Scotland and Northern Ireland) and the Sale of Goods Act 1893 as amended by the 1980 Act (Ireland) treat a warranty as a stipulation collateral to the contract’s main purpose. Breach of warranty gives a right to damages but not to...

Distressed M&A Insurance: Traditional and Synthetic W&I, Contingent Risk Cover, Insurers' Appetite, Insolvency Processes, Disclosure and Diligence, Pricing and Case Studies

Published by a LexisNexis Insurance & Reinsurance expert

Practice notes

warranty and indemnity and contingent risk insurance in distressed M&A transactions

HWF undertook an in‑depth interview programme with 17 market insurers to produce a paper delivering insight and clear, extensive guidance on how warranty and indemnity (W&I) and contingent risk insurance are applied in distressed deals, mapping the solutions available and the key requirements to obtain strategic cover.

What types of insurance cover are available for distressed transactions?

For distressed transactions, three insurance options can be offered:

Traditional W&I cover

Traditional W&I cover can be used when:

the seller and/or management provide warranties under the sale and purchase agreement (SPA) or a warranty deed (WD)
the sellers give sufficient disclosure on the contents of the warranty suite in the SPA or WD
a virtual data room or comparable document repository is available for review
buyer due diligence (internal or external) has been completed addressing the scope of the warranties in the SPA

Observations

Traditional W&I cover is the preferred route where achievable. This is chiefly because insurers take comfort where an informed party with the requisite knowledge of the business is prepared to conduct a robust/fulsome...

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Adrian Furlonge

HWF

Adrian is a co-founder and partner of HWF and has extensive experience structuring insurance products for M&A transactions. Prior to this he was both a lawyer and M&A underwriter.Adrian spent 4 years as a lawyer at CMS in their insurance and reinsurance department. He then joined AIG in 2010 as their UK M&A underwriter subsequently taking on responsibility for a team of UK and European underwriters. Adrian and his team of underwriters wrote over 300 policies during his leadership including acting as lead underwriter on more insurance programmes than any other insurer.Adrian was instrumental in the growth of M&A insurance products in the UK and Europe. His sector expertise is highly regarded by lawyers, clients and peers....

Arianna Scocchera

HWF

Arianna joined HWF in November 2018. Since then she has worked on a broad range of transactions in the private equity, infrastructure and real estate sectors. Prior to HWF, Arianna worked as a legal consultant in London through Eversheds Sutherland and at the United Nations, first as a jurist intern at the Secretariat in New York and then as a legal analyst at the International Fund for Agricultural Development (IFAD) in Rome.Arianna speaks English, Italian, and French....

Dr Mark Parrett

Hemsley Wynne Furlonge LLP

Mark is Head of Tax Insurance at HWF, specialising in advising clients on creative and innovative specific tax insurance solutions. He joined HWF in 2018 having spent more than 10 years as a Tax Advisor, including at two of the ‘big four’ accountancy firms.Mark’s previous experience primarily consisted of advising on the tax elements of M&A transactions (e.g. tax due diligence, acquisition structuring, exit planning etc) for a variety of large corporate and private equity clients. Mark advised on transactions across a wide range of jurisdictions and industry sectors. He qualified as a Chartered Tax Advisor in 2011.Mark also advised the M&A tax insurance industry on the tax technical merits of the specific tax risks they were potentially looking to underwrite....

Web page updated on 21/05/2026

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