David Cummings and Lauren Gubricky are joined by Jeff Buzen of McGill and Partners to discuss representations and warranties insurance, best practices for making claims and trends in the industry. ----more---- Transcript: Intro: Hello and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues and topics of interest affecting commercial policy holders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  David: Hello and welcome to another episode of Insured Success. Thanks for joining us. My name is David Cummings. I'm a partner at Reed Smith in our insurance recovery group. A way of just a little bit of background. My practice focuses on navigating insurance coverage, disputes, litigation, mediation and arbitration for our corporate policyholder clients, as well as helping those clients navigate insurance placements, renewals claims and the like all with their insurers. An ever growing part of that practice involves a product called representations and warranties insurance or reps and warranties insurance. That's a topic of our discussion today. So before we get started, I have a few introductions are in order. Uh I'm joined today by my colleague, Lauren Gubricky, an associate in Reed Smith's insurance recovery group. Hi, Lauren.  Lauren: Hi, Dave. Thanks for having me.  David: I’m also joined by our guest, Jeff Buzen, a partner in financial lines at McGill and Partners. Hi, Jeff. And thanks for joining us today.  Jeff: Thanks Dave. Great to be here.  David: So, between the three of us, we're gonna cover a few topics today. So I'm gonna start and provide a high level overview of reps and warranties insurance, what it is and how it's used. Then I'm gonna pass it to Lauren who's going to focus on reps and warranties claims and a few best practices. And along the way, we're gonna talk with Jeff to provide us with some insights and trends with respect to the reps and warranties market. So with that, let's get started. So let's start with a quick overview, reps and warranties insurance. What even is it? At at a very high level in a private equity deal, we have company A, the buyer purchasing company, B, the seller. So as part of that purchase and as a result of information borne out through due diligence, the seller makes certain reps and warranties regarding its business. Those can include ongoing risks, contingent liabilities, reps related to financial statements and so on. Traditionally, to hedge against the risks of inaccurate or incomplete information, the asset purchase agreement would provide recourse to the buyer in the form of an indemnity provision and the way that works is a seller would have to back that obligation with funds in the form of a hold back or escrow uh and keep those funds in place for a negotiated survival period, often for several years. Now, the issue is that these indemnity provisions can be the source of extensive negotiations in and of themselves negotiations that could add layers of unwanted complexity to a deal. Um And that may result in delays and disagreements. And in some cases, historically, the deal could collapse entirely over, over these disagreements and these negotiations. So insteps reps and warranties insurance. This product was developed to at least in part to avoid these issues and speed up deals by shifting the risk to a third party insurance company. This allows for higher indemnity limits and survival periods without material increasing seller exposure all while being able to keep up deal pays to close quickly and not be bogged down by extensive disagreements or negotiations between the buyer and the seller. So what do these policies look like? So they can be purchased by the buyer as first party coverage or the seller as third party coverage in practice t