Warranty & Indemnity Insurance and Expert Evidence UK
What Is W&I Insurance?
The W&I insurance warranty claim process allows M&A buyers to claim under an insurance policy for financial warranty breaches rather than directly against the seller. W&I has become standard in UK M&A for transactions above a certain size threshold.
How W&I Changes Who Brings Claims
In a W&I claim, the insurer pays the buyer under the policy and then pursues its subrogation rights against the seller, or the buyer pursues the insurer directly if the insurer refuses to pay.
| Traditional Warranty Claim | W&I Insurance Claim |
|---|---|
| Buyer vs Seller | Buyer vs Insurer (or Insurer vs Seller by subrogation) |
| Seller often individual (HNWI) | Insurer (deep pocket) |
| Seller may resist disclosure | Insurer typically litigates differently |
| Limitation period: negotiated | Policy limit: fixed by policy |
Expert Evidence in W&I Claims
The forensic accountant's role is the same in W&I claims: establishing the true financial position at completion and quantifying the diminution in value. However, W&I insurers typically conduct more rigorous expert evidence scrutiny, and the Inspired Education v Crombie [2025] warning about expert quality is particularly relevant in W&I claim litigation.
W&I Policy Limitations and Expert Evidence
W&I policies typically exclude fundamental warranties (title, capacity), fraud, and matters known to the buyer at signing. The expert must address whether the claimed loss falls within the covered warranty categories and the policy period.
Frequently Asked Questions
Is W&I insurance now standard in UK M&A deals?
What evidence do W&I insurers require in a claim?
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