Map

Business is complex with lots of teams, departments, assets, liabilities and people. Each of these come with their own risks. To help clarify and cover those risks, we first need to organise our thoughts. We do this in a map. Our map is a circle and we put your business at the centre of it.

Let’s look at our map.

Map

Every deal is different. Every data room is arranged in its own way. Every warranty suite is unique. On deals lawyers, corporate finance advisers and management have usually compiled a logical data room that shows a complete view of the business information. In the ‘Map’ stage we at Wiispa look at the business through the Business Areas (a broad categorisation of business topics) and Business Segments (focussed risk areas derived from typical warranty subjects). This does not require additional work on your part. It is simply our way to give clients a standardised blueprint through which to look at risk.

Let’s look at the key risks.

Clarify

Every business is different and has its own risks. During a transaction these will be set out in due diligence reports. We will work with you to understand what your key risks are and where these sit relative to our understanding of the business. We consider the above three areas of insurance as layers wrapping around the business.

Let’s look at how these fit together.

Cover – W&I

The first layer of cover on a deal is W&I. This works on the basis that the SPA warranties are true on the date given, effectively on a backward-looking basis. These warranties are relied upon by a buyer, and if it transpires any one of them was incorrect on the date given, a breach of warranty has occurred. If a loss flows from this breach a claim can be made.

In the W&I policy, warranties are covered or excluded (and in some cases they will be modified for the purposes of the policy). Critically, the W&I insurance covers unknown risks. To the extent that you know of an issue you can’t make a claim under the W&I policy.

So what about where you have known issues?

Cover – Contingent Risk

Known issues can often be addressed in known risk / contingent insurance policies. The most commonly occurring policies on transactions are Tax Contingent Risk Policies. Other contingent risk policies we often see are Title Risk Policies, Intellectual Property Policies and Environmental Policies. The areas that Contingent policies address are constantly growing. We keep our blog up to date with current information on such polices. As a collective these policies are represented by the second layer in the Risk Wrapper. 

And what about the General Insurance that a business carries?

Cover – General Insurance

When people refer to General Insurance there a range of different policies to which they may be referring. The key point is that while titles can be vague each of those policies covers a number of insured events or triggers. At this stage of the Risk Wrapper we are looking to understand where the General Insurance applies to the business in our Map and how this aligns with the W&I.

Let’s see the full Risk Wrapper.

Cover – Wiispa Risk Wrapper

The combination of cover under the three layers forms the Wiispa Risk Wrapper. 

Claim

Claims are where the insurers prove that the insurance product works. When a claim is valid we are here to assist you getting paid as quickly as possible. Speaking candidly not all claims are valid and some may be excluded by the policy terms and conditions.

Using the Wiispa Risk Wrapper we look to make it as clear as possible how your insurance protection interacts with your business so you are clear on what is potentially covered. Our job is to guide you through claims, ensuring you understand the process and assist with presentation of the information to maximise the chances of efficient settlement.