Generally, we will not offer terms for transactions where written legal, financial and tax due diligence undertaken by external specialists is not available.

Yes. As we review the due diligence reports in order to get comfortable we require that it is written down. To the extent issues are partially explored or omitted we will need to raise Q&A to understand the position (and potentially exclude cover where information is not available).

W&I policies do not insure future events and so where there is a gap between signing and completion with warranties repeated at both dates a bring down of disclosure is required at completion. At bring down of disclosure any newly identified matters will be disclosed and so excluded from cover by the warranties given on the completion date.

New breach cover is a policy enhancement, which was developed by Brockwell’s underwriters, by which the W&I policy takes on the risk of warranty breaches arising between signing and completion.

This policy enhancement is available on a case-by-case basis for an additional premium. Typically we will offer this for deals where the gap between signing and completion is expected to be no more than two months.

Where the warranties given by a seller are all given subject to the awareness of the seller, this awareness qualifier can for an additional premium be disregarded (or ‘scraped’) for the purposes of the W&I policy.

The W&I policy would still implement an awareness qualification to specific warranties where such qualification would be in-line with market practice.

A synthetic tax covenant (or ‘phantom tax covenant’) contained in a W&I policy is a tax covenant that is given by the insurer as an indemnity within a buy-side W&I policy instead of by the seller.

This is available for an additional premium and operates in the same manner as a conventional tax covenant. It is often used as a way to limit the costs of negotiating a tax deed/covenant between transaction parties.

Where a matter is noted in due diligence, but is theoretical in that it does not relate to a substantive identified risk and is classified as a low, very low or remote risk and the quantum is not material, then notwithstanding the reference in the due diligence (for an additional premium) we may be able to undertake further underwriting and offer cover for such identified matter.

We are only able to offer affirmative cover where the risk noted in the due diligence is straightforward, we do not consider the quantum to be material, and there is sufficient due diligence (or further information available) to allow us to understand the risk.

Tax insurance provides an indemnity to the policyholder for an identified tax risk. We regularly cover international risks between £1m and £45m to assist buyers with managing risks identified during due diligence. For more information click here.