W&I (warranty & indemnity) Insurance – Selected Issues

Abstract

The aim of the article is to present W&I insurance, which is a type of transactional risk insurance. In transactional practice, W&I insurance is becoming a market standard in M&A processes and real estate transactions, particularly those involving commercial real estate. Nevertheless, W&I policies are still predominantly offered by foreign insurance companies, frequently under foreign law. Along with the development of accompanying title insurance and insurance for specific/defined transaction risks, including tax or environmental risks, they are becoming a tool which is increasingly applied for risk allocation, thus replacing the escrow accounts used in the past. The article describes selected practical issues related to this type of insurance.