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8 July 2024

Meet us at the IBA Annual Conference 2024 in Mexico City in September

1 July 2024

Sebastian Christmas Poulsen joins as Partner

17 June 2024

Navigating transactional risks with W&I insurance

14 June 2024

Entrepeneurship in Denmark – New Strategy: Denmark aims to become a world-class entrepreneurial Country

27 May 2024

Jacob Bier joins as Partner

22 April 2024

The EU Listing Act – A new Chapter for European Capital Markets

15 April 2024

The Danish Financial Supervisory Authority has released the 2023 statistics on violations of Danish capital market regulation

22 March 2024

Lennart Meyer Østenfjeld joins as Partner

5 March 2024

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17 June 2024

Navigating transactional Risks with W&I Insurance

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Warranties & Indemnity insurance (“W&I insurance”) has become a well-known tool to mitigate certain transactional risks and provide deal certainty in M&A and Real Estate M&A transactions. However, W&I insurance policies have inherited limitations which may seemingly conflict with the initial aim of taking out a transactional insurance.

This article delves into the pros and cons related to taking out W&I insurance and describes other insurance products used in recent transactions which Moalem Weitemeyer has advised on.

Although W&I insurance is more frequently used in larger transactions because of the associated costs, it remains applicable in smaller transactions where the premiums for W&I insurance can be relatively moderate. The increasing competitiveness on the insurance markets has led to insurance companies offering appealing premiums and terms, making W&I insurance more feasible for mid-size and small transactions.

The cost of the W&I insurance is often in a range between 0.4%-2% of the policy limit depending on the choice of insurance coverage and the risks related to the target company or properties. Additionally, there will be costs to the W&I underwriter’s advisors and taxes. Most often, the costs of the W&I insurance are paid by the buyer. In some cases, however, the costs may be split between the seller and buyer due to negotiations or covered by the seller entirely.

Andreas Hvid Clement

Partner

+45 30 37 96 89

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Simon Winther Bjerregaard

Senior Associate

+45 30 37 96 85

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Hadil El-Jamal

Associate

+45 30 37 96 78

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