Transactional Risk Insurance (TRI)

Transactional Risk Insurance (TRI) has become an indispensable tool in modern mergers and acquisitions, private equity transactions, and corporate restructurings. In any deal, the seller makes a series of representations and warranties about the target business covering its financial condition, legal compliance, intellectual property, tax position, and contractual obligations. If those representations later prove to be inaccurate, the buyer faces financial losses that may not have been anticipated at the time of signing. TRI most commonly in the form of Warranty & Indemnity (W&I) Insurance transfers that risk from the transaction parties to the insurance market, allowing deals to close faster, cleaner, and with greater confidence on both sides.

For buyers, W&I insurance provides a direct right of recovery against the insurer for losses arising from warranty breaches, eliminating the need to pursue the seller which may be difficult after deal close, particularly in private equity exits where seller entities are wound down. For sellers, it enables a clean exit by reducing or eliminating the escrow holdback that would otherwise be required to support warranty liability, freeing up deal proceeds immediately. Our TRI advisory team works alongside your legal and financial advisors throughout the due diligence and negotiation process to structure a policy that integrates seamlessly into the transaction timeline.