Market Trends 2021: Representations and Warranties Insurance

Summary

This practice note discusses market trends in provisions relating to representations and warranties insurance in acquisition agreements for transactions announced in 2021. The discussion covers the prevalence of representations and warranties insurance generally, which party pays the policy premium, whether retention amounts are referenced in the agreement, and the effect of representations and warranties insurance on selected agreement provisions. The data analyzed in this practice note was obtained using Market Standards, which contains over 38,000 publicly filed M&A deals from 2008 to the present. A total of 150+ data points are searchable for deals from 2017 to present, for public target deals initially valued at $100+ million and private target deals initially valued at $25+ million. There are 80+ searchable deal points for transactions with first filings prior to 2017. For more detail on the deal points that can be searched in Market Standards M&A, click here.