Specialists for W&I policies - with a strong track record

Integrated consulting with a clear focus

Warranty and indemnity insurance policies (W&I insurance) are a proven instrument for hedging transaction risks. Warranties and indemnities from company purchase agreements are insured in W&I policies.

For many years, our experts have been supporting national and international transactions – from medium-sized succession solutions to large-volume private equity deals. With a sound understanding of the market, an excellent network and in-depth know-how, we offer efficient, legally compliant and practical advice on the policies as well as the drafting of insurable due diligence reports with a clear focus on efficient and smooth underwriting.

Whether buy-side or sell-side: we provide fully insurable legal, tax and financial due diligence, accompany the underwriting, support the structuring of the policy and improve the cover through endorsement, enhancement or synthetic clauses. We take legal, tax and underwriting perspectives into account – for resilient policies and real deal security.

Established consultant for insurers

As W&I underwriting counsel, we manage all relevant workstreams for insurers – including selective due diligence, structured risk analysis and claims support. Thanks to our experience and negotiation skills, we ensure efficient processes through a focused and risk-oriented structuring of underwriting, taking into account the specified timelines and risk-appropriate policies.

Services from a single source – efficient, secure, structured

Our interdisciplinary team delivers W&I-specific solutions from a single source – centrally coordinated, legally robust and economically sound.

Our services

Private Equity (Buy-Side/Sell-Side) 

  • Fully insurable legal due diligence 
  • Fully insurable tax due diligence 
  • Fully insurable financial due diligence  
  • Support in underwriting, incl. negotiation of cover positions in the policy

Companies/succession

  • Pre-negotiation of the W&I insurance  
  • Advice and support with the seller-buyer flip 
  • Advice and support with hard-stapled insurance 
  • Legal, tax and financial due diligence (fully insurable)

Insurances

  • Underwriting counsel (legal, tax and financial) from a single source and as required
  • Preparation of (selective) due diligence for W&I insurance, which is deemed to be disclosed (instead of or in addition to buy-side due diligence) 
  • Claims support

M&A advisor

  • Support with LOI and W&I concept implementation
Dr. Christiane Krüger, LL.M.

Dr. Christiane Krüger, LL.M.

Director

Attorney-at-law (Rechtsanwältin), Certified Tax Advisor

Uwe Roth

Uwe Roth

Partner

Certified Tax Advisor

Till Werner

Till Werner

Senior Manager

Rechtsanwalt

Stephan Zuber

Stephan Zuber

Partner

Attorney-at-Law (Rechtsanwalt), Specialist Lawyer for Commercial and Corporate Law

What can we do for you?

Talk to us - simply without obligation.

Contact now

W&I insurance 101 – what you need to know

W&I insurance is an established instrument for hedging risks in M&A transactions. But what exactly does it cover? When does it make sense? And how can it be optimally structured? Our FAQs provide you with well-founded answers to frequently asked questions from practice – from the basics to special topics such as enhancement, special tax risks and due diligence requirements.

What is W&I insurance?

W&I insurance (Warranty & Indemnity) protects buyers or sellers in M&A transactions against the financial consequences of breaches of warranty in the company purchase agreement. It replaces or supplements contractually agreed liability provisions. It typically covers warranties relating to finance, taxes, contracts, the environment, labor law and IT. Special tax risks in the context of transactions or separate from transactions as well as real estate transfer tax (RETT) risks can also be covered by separate special tax risk insurance.

What does “insurable due diligence” mean?

For a guarantee to be insurable, a so-called insurable due diligence must be performed. This involves a technical and methodical examination of the contract’s relevant subject matter in order to ensure that it is insurable. The insurable due diligence must clearly identify the scope of work in order to enable an exact determination of the cover position. It is also characterized by a clear risk qualification and quantification and thus accurately reflects the disclosure mechanism.

What advantages does W&I insurance offer – above and beyond risk cover?

W&I insurance is much more than just a hedging instrument: it can become a strategic deal component. By eliminating traditional liability agreements, sellers achieve a clean exit, while buyers receive a defined, enforceable recourse regime. In competitive bidding processes, a fully structured W&I policy becomes a real deal enabler.

How important is the quality of due diligence?

The insurability of a guarantee depends significantly on the quality, structure and granularity of the due diligence. For a fully insurable due diligence, topics must be precise, risk-oriented and clearly documented. The following applies: it is not the quantity but the relevance that counts.

What does enhancement / endorsement mean in underwriting?

Under certain conditions, insurers can grant improved conditions of cover, for example through:

  • Enhancement, e.g., in the form of removing materiality or knowledge scrapes provided for in the SPA exclusively for the purposes of the policy and granting of affirmative cover for selected (tax) risks
  • Endorsement, i.e., subsequent extension of the cover position through checks following the conclusion of the policy and subsequent extension of the original policy cover

However, these extensions require sound negotiations, clean due diligence documentation and good broker/advisor coordination.

How to deal with special risks (such as tax, environment, IT)?

Dealing with special tax issues and issues not covered by the scope of legal due diligence in order to improve the cover position:

  • Special risk insurance products are increasingly being used for non-standardized tax risks, for example, with regard to structuring issues or real estate transfer tax risks (RETT risks). These are stand-alone tax risk insurance for defined risks (e.g., book value neutrality of planned carve-outs, tax exemption of restructuring income, real estate transfer tax exemption of a share transfer).
  • For non-tax risks in the areas of environment, ESG and/or IT, which are not usually part of a legal due diligence, the coverage of corresponding guarantees in the SPA can be achieved through additional due diligence reports for these subject areas.
  • If the SPA does not provide for a tax clause and/or tax guarantees, hedging or exemption from corresponding tax risks can nevertheless be achieved by implementing a synthetic tax clause or synthetic tax guarantees purely for the purposes of the policy.

How are premiums and market conditions developing?

The W&I market in Germany remains dynamic. Premiums remain comparatively stable – despite rising claims figures – while insurers are increasingly willing to underwrite more complex risks.

Practical tip: How to achieve a structured W&I process

 

  1. Plan early: clarify W&I concept with broker and advisor before starting due diligence
  2. Optimize documentation: Structure due diligence reports in such a way that insurability is guaranteed
  3. Appropriate handling of risks in the context of disclosure: targeted and structured (disclosure letters, risk register)
  4. Clear allocation of roles: realistically map the insurance company’s role in the SPA
  5. Plan for claims management: set up structured processes