W&I Police and Risk Management in Corporate Acquisition Contracts: between Market Law and Practice

On Tuesday 8 April 2025, a thematic study was held on the role of Warranty & Indemnity Insurance in M&A operations, focusing on market practices, legal implications and on the evolution of the instruments for managing transactional risk.

The comparison, moderated by Professor Angelo Borselli of Bocconi University, was between operators and professionals in the sector, such as Martina Nobile and Benedetta Cirillo, respectively Vice President and Broker of M&A Marsh S.p.a. and Giulio Gambini and Salvatore Calì, Partner and Senior Associate of LMS Studio Legale, who highlighted the strategic importance of W&I policies in promoting the conclusion of transactions, thanks to their ability to transfer the insured risk from the seller to the insurance market, strengthening the protection of the buyer without affecting the contractual balance.

During the meeting, the main profiles of the declarations and guarantees (R&Ws) in the sales contracts (SPA) were analysed, distinguishing between fundamental R&Ws and business R&Ws, and deepening the compensation mechanisms with the related time and economic limitations such as exemption, de minimis, cap, escrows and fidejussioni.

Particular attention has been paid to the evolution of W&I policies in Italy, where over the last 4 years there has been an increase of 68% of the covered transactions and a significant decrease of insurance premiums. The shift from sell-side structures to buy-side models, today prevailing, and the crucial importance of due diligence for the validity of the coverage, with reference to both the drafting of reports and the broom of work.

Finally, the main exclusions of W&I coverage were highlighted, with a distinction between structural ones such as crime, leakage and forward-looking statements, and potentially removable ones in the face of deep due diligence.

The meeting confirmed the growing role of the insurance player as a discourse actor in the contractual dynamics, able to facilitate closing and increase trust between the parties, through increasingly sophisticated tools adapted to the needs of the market.