A consortium of 12 insurance underwriters led by Liberty GTS recently paid a €50 million claim under a warranty and indemnity liability (W&I) insurance policy issued in connection with FSN Capital’s acquisition of Gram Equipment. [1] This is one of the largest, publicly announced claims paid under a W&I policy in recent memory. A few key points about W&I policies and claims in general can be derived from publicly available information about this claim, [2] and we briefly describe these points below.

As background, according to FSN Capital, it filed its insurance claim in June 2018, shortly after its acquisition of Gram Equipment in early 2018. The insurance claim alleged that the seller breached several of the warranties in the share purchase agreement, including warranties related to accounting material and the seller’s duty of disclosure. Following an investigation, the insurers agreed to pay the full €50 million limit under the W&I insurance policy.

A few key points to note:

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