In a transaction, either the buyer or the seller may be protected by W&I insurance. It aims to provide back-to-back cover for the seller’s liability under the Sale and Purchase Agreement (SPA). The W&I policy “steps into the shoes” of the seller by responding to claims brought by the buyer for a breach of warranty or claim under a tax indemnity.
A buyer policy indemnifies buyers for losses caused by breaches of warranties and tax indemnities given by the seller in the SPA. It enables the buyer to claim directly from the insurer without first having to pursue the seller.
A seller policy indemnifies sellers for losses resulting from claims made by the buyer for breaches of the warranties and tax indemnities given in the SPA.
W&I Insurance enables buyers to:
W&I Insurance enables sellers to:
The policy, whether seller-side or buyer-side, will indemnify the insured for loss resulting from a breach of warranty or tax deed/covenant in a Sale and Purchase Agreement (SPA).
A seller-side policy covers the seller for its own innocent misrepresentations; a buyer-side policy covers the buyer against the seller’s misrepresentations (innocent or otherwise). The buyer claims directly against the insurance policy and does not have to seek recourse against the seller.
Representation and Warranties Indemnity policies are short-term products and are underwritten by AIG South Africa Limited, FSP No: 15805