Comprehensive and tailored protection against financial loss resulting from inaccuracies in the warranties and indemnities relating to an acquired company or business.
New Zealand market conditions are currently “ripe” for people looking to sell their business, with indicators including predicted earnings and corporate appetite for deals on a continued positive trend1. With lower regulatory hurdles than other countries, and a stable political and legal environment, New Zealand is also an attractive environment for offshore investors. These factors support the current buoyant M&A activity2 in New Zealand.
As in all markets, however, there are a number of risk factors that can hinder the successful implementation of a merger, acquisition or restructure, including potential inaccuracies in the warranties and indemnities to be given by a seller.
Warranties and indemnity insurance provides protection from the financial losses that may arise from such inaccuracies through the transfer of the risk of losses being incurred in the case of a breach of warranty or indemnity. This solution can significantly reduce or remove transaction risk facilitating the completion of the proposed transaction.
1 KPMG New Zealand M&A Predictor, September 2014
A buyer-side policy allows the buyer to recover losses from inaccuracies in the warranties and indemnities directly from AIG without first pursuing recovery from the seller.
A seller-side policy reimburses the seller for losses from warranty and indemnity claims by the buyer.
Each policy is tailored to meet the specific needs of the transaction, with coverage designed to: