Warranties within sale and purchase agreements provide meaningful protection to a buyer for pre-completion risks but do not survive completion and any new issues arising in the period of ownership remain uninsured. O&U insurance can remedy this by providing a set of standard “loss events” that covers most concerns in relation to Real Estate risk. O&U provides assurances to the buyer that it will enjoy future ownership and use of the asset without interference.
Ian Theato, CEO, RSG Transactional Risks Europe, said, “The main driver behind the strategic partnership is to ensure that buyers of Real Estate assets are utilising the most efficient and relevant capacity for each set of risks that may arise from the purchase. RSG can now offer W&I and O&U under one solution while the limit of indemnity between the two products is separate. Therefore claims arising from a public law issue, for example, do not erode the indemnity limit for breaches of warranties.”
Laura Potamianos, Head of Real Estate at RSG Transactional Risks Europe, added, “Brokers prefer to negotiate with a single insurer and now RSG can provide up to £50m in Tax Liability insurance, £100m in W&I and now £275m in O&U protection. That is a compelling offering for our Real Estate clients.”
Commenting further, Jean Claude Domaingue, Director of CLS Risk Solutions, explained, “Cover for Real Estate risk needs to be clear. Whilst W&I perfectly addresses the “knowledge transfer risk” that is present in a transaction, O&U is the alternative to asking a seller to look into a crystal ball and warrant the future; O&U will protect buyers against a fully comprehensive list of future adverse events that could interrupt ownership or use, efficiently and effectively, without the need to construct or evidence a breach of the SPA. O&U will enable a more streamlined and transparent transfer of Real Estate risk which provides the buyer with a tangible advantage during the due diligence stage of the purchase.”
As the mergers and acquisitions insurance space become more competitive and innovative, RSG Transactional Risks Europe and CLS Risk Solutions stay ahead by continuing a track record of innovation in the transactional insurance market and bringing new products to this space that improve and enhance insurance cover for their insureds.