W&I Insurance (Warranty & Indemnity Insurance)

W&I insurance covers losses arising from unknown breaches of warranties and — depending on the structure — certain indemnities under the company purchase agreement. Known issues and expressly disclosed matters are regularly excluded from cover. They are either disclosed in the disclosure letter, addressed via specific indemnities, or remain with the seller or the buyer.

In the mid-market, retentions frequently lie at around 0.5–1.0% of enterprise value, while policy limits typically amount to around 10–30% of enterprise value. Premiums customarily move in the region of around 1% of the sum insured. W&I insurance is used in PE exits and can supplement or partly replace classic escrow solutions.