Warranty and Indemnity (W&I) insurance has gone from a rarely-used niche product to a standard feature of UK M&A deals, protecting against breach of warranty claims after a business sale.
When a business is sold, the seller gives a set of warranties, statements about the company's financial position, contracts, compliance, and liabilities. If one of those warranties turns out to be false, the buyer can claim against the seller. W&I insurance transfers that risk to an insurer instead.
Why it's become standard practice: For sellers, particularly private equity funds, W&I insurance allows a clean exit without money held back in escrow for years against potential claims. For buyers, it means recourse against a well-capitalised insurer rather than chasing a seller who may no longer be reachable or solvent.
In competitive sale processes, offering W&I-backed warranties can make a bid more attractive by removing the buyer's need to negotiate a large escrow or indemnity holdback, directly speeding up deal completion.
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Speak to a Specialist →W&I terms are underwritten individually per transaction. Always confirm current terms with a specialist M&A insurance broker and your legal advisers.