Representation & Warranty Insurance For M&A

Parties who can agree on most of the basic terms in an M&A deal may reach a sticking point when it comes to allocating responsibility for post-closing risks. Nixon Peabody attorney Todd Tidgewell looks at a kind of insurance that has gained currency with both buyers and sellers to address that issue. So-called representation and warranty (R&W) insurance can free sellers from the need to set aside an escrow fund. It can also cover the buyer in the event of a claim that would not have been covered by those funds.