October 2026 - Mergers & Acquisitions
Overview
Representation and warranty insurance (RWI) is an insurance product sometimes used by buyers to provide recourse for the seller’s breach of the representations or warranties in the purchase agreement. The policy reimburses the buyer for loss caused by the breach. RWI changes how deals are negotiated, risk is shifted, and how diligence is scoped. Indeed, evaluating the buyer’s due diligence conducted on asset, stock, and carveout deals is key to underwriting an RWI policy.
How Momentum Can Help
Engage Momentum Advisors for employee benefits, executive compensation, and employment underwriting counsel to pressure-test the buyer’s due diligence and take appropriate underwriting policy action. Momentum will help identify any diligence gaps, advise on and draft policy exclusions, review transactional documents, and attend the underwriting call.
Specifically, Momentum will assess the diligence conducted, as applicable, on the seller’s employee benefits, executive compensation, and employment matters such as: (i) historical retirement plans, (ii) health and welfare plans considering matters such as the Affordable Care Act and Multiple Employer Welfare Arrangements (MEWA), (iii) Section 409A compliance and corrections, (iv) Section 280G implications, and (v) employment law matters such as the Fair Labor Standards Act and independent contractor classification.
Additionally, Momentum will review the purchase agreement and disclosure schedules to assess impacts on the RWI policy and calculate potential exposure amounts for any identified risks.
Momentum can also draw on its legal network to assemble a broader legal underwriting team to support all your RWI underwriting needs.
Contact Momentum Advisors to assist with your RWI needs at: info@momentumadvisors.law