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...

Warranty and indemnity insurance in private M&A: strategic uses, buyer- and seller-side policies, key terms and exclusions, underwriting process and FAQs

Published by a LexisNexis Corporate expert

Practice notes

warranty and indemnity (W&I) insurance in M&A transactions

W&I insurance can be used in private company sales and purchases, whether the deal is a share sale or an asset sale. The buyer or the seller may arrange cover for losses arising from breaches of the seller’s warranties or indemnities set out in the relevant share purchase agreement or asset purchase agreement (the acquisition agreement), including any tax indemnities under a tax covenant. Although chiefly applied in private company M&A, it may on occasion feature in public company transactions where the target or its shareholders provide warranties. As well as allocating risk, parties frequently use the policy tactically: a bidder in a competitive auction can separate its offer from rivals, and sellers can reduce sums locked in escrow and realise proceeds more quickly. In the UK and other jurisdictions, transactional lawyers and their clients commonly rely on W&I insurance to manage risk in a sale or acquisition. Lawyers advising clients who are...

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Mary Duffy

AIG

Mary is a former practicing attorney who is Global Head of AIG's Mergers & Acquisitions Insurance Group, specializing in Reps & Warranties Insurance (W&I), Tax Insurance and other insurance solutions to facilitate mergers and acquisitions. Mary joined AIG in 2011 after spending 15 years with Aon where she was Managing Director of Aon's Private Equity & Transaction Solutions Group. Prior to joining Aon, Mary was an associate at Morgan, Lewis & Bockius where she specialized in mergers and acquisitions, securities and general corporate law. Mary earned her J.D. from Georgetown University Law Center and her B.A. from Juniata College....

Web page updated on 22/05/2026

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