Fundamental Top-Up Insurance

DUAL Asset can provide Fundamental Top-Up Insurance in the Nordics and Asia Pacific.

In the complex and fast moving world of mergers and acquisitions, securing the right coverage for every transaction is vital for success. Whilst Warranty and Indemnity (W&I) insurance is a trusted tool, there are instances where its coverage limit doesn't match the transaction value. Fundamental top-up insurance is a solution designed to bridge this gap and provide the additional coverage needed for high-value transactions.

What is Fundamental Top-Up Insurance?

Fundamental top-up insurance is a specialised coverage, sitting in excess of the W&I policy limit, insuring loss in respect of the title and capacity warranties. It is designed to complement W&I insurance in transactions where the limit doesn't meet the transaction value. The policy follows the terms of the underlying W&I policy entirely. The advantage of this structure is there is no need to negotiate a new policy or address any potential gaps in coverage or differences in the loss definition.

This structure does not allow DUAL Asset to accommodate any additional requirements not included in the underlying policy, nor to include contingent cover for any known risks. A standalone specific risk policy can be underwritten if necessary.

How can Fundamental Top-Up Insurance help in M&A transactions?

• Enhanced Coverage for High-Value Transactions: Provide cover for the full value of the target, target group and/or real estate assets and allow the seller to give limited or no warranties or to cap their liability.
   
• Manage Risk: Help manage risk where parties cannot or decide not to undertake full due diligence.
   
• Seamless Integration with W&I: By following the W&I insurance format, fundamental top-up insurance offers a streamlined approach, making it easier for businesses to obtain the additional coverage they need without navigating a separate, complex process.
   
• Cost-Effective Solution: Instead of seeking a completely new insurance policy for higher transaction values, businesses can simply top-up their existing W&I coverage, often resulting in cost savings.