Warranty Insurance Claims Rise as M&A Landscape Evolves
New industry reporting reveals surging notification rates and shifting post-closing recovery patterns in global dealmaking.
Updated on Oct. 20, 2026 in Corporate Finance
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The International Underwriting Association reports a sharp rise in warranty and indemnity insurance notifications as these policies become the primary source of recovery in M&A deals. Data from 2025 shows a marked increase in both volume and severity of claims as traditional seller indemnities disappear.
Why it matters
The market has transitioned from using insurance as a supplementary tool to relying on it as the sole source of post-closing financial protection. This change highlights a structural shift in risk management as seller indemnities become increasingly rare in global transactions.
Global warranty and indemnity notifications rose approximately 35% in 2025, with a 150% surge recorded specifically in the UK. Carriers in the Euclid Transactional programme have now paid over US$1 billion in cumulative claims.
The players
International Underwriting Association
This is a global trade association that represents international insurance and reinsurance companies operating in the London market.
Euclid Transactional
This organization is a major underwriter specializing in transactional insurance products including representations and warranties coverage.
English High Court
This is a senior court of England and Wales responsible for hearing major civil cases including complex corporate litigation.
The details
W&I policies now serve as the primary mechanism for post-closing recovery, with 69% of North American transactions in 2025 carrying no seller indemnity. A recent ruling by the English High Court further clarified that proving corporate dishonesty requires evidence that a specific individual knew both the relevant facts and that they falsified a warranty.
Timeline
2023 served as the EMEA warranty and indemnity notification baseline year.
2025 captured the majority of claims data featured in recent industry reports.
January 2026 marked the publication of the Euclid Transactional Global RWI/W&I Claims Study.
October 2026 saw the official publication of the International Underwriting Association report.
Market Dynamics
The legal standards established in Veranova Bidco LP v Johnson Matthey Plc dictate the enforceability of claims in the current M&A environment. This court precedent informs how insurers evaluate corporate dishonesty, reflecting broader trends in risk management and transactional liability.
The shift toward using W&I insurance as a primary recovery source means that transaction participants must now place greater reliance on the accuracy of due diligence and policy terms. Investors should note that 51% of North American claims are filed more than a year after closing, highlighting the need for long-term monitoring of deal warranties.
The takeaway
The move away from seller indemnities means that the insurance policy is often the only path for recovery after a deal closes. Parties to an M&A transaction should ensure that policy limits and retention levels are carefully negotiated to match the potential valuation risks of the target business.
Further reading
Learn more about the latest trends in Corporate Finance regarding risk management and insurance.
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