RSG Transactional Risks Europe – a specialized managing general underwriter focusing on offering transactional insurance solutions to the M&A community – has entered into a strategic partnership with CLS Risk Solutions in the UK to provide comprehensive transactional risks protection to real estate asset buyers.
A release said that the new product, which is a combination of warranty & indemnity insurance, as well as ownership & use insurance, offers protection for real estate buyers with limits up to £275 million per transaction.
While warranties within sale and purchase agreements can cover a buyer for pre-completion risks, any new issues that occur during the period of ownership remain uninsured. O&U insurance can address this vulnerability by providing a set of standard “loss events” that covers most concerns related to real estate risk, a release explained.
“The main driver behind the strategic partnership is to ensure that buyers of Real Estate assets are utilising the most efficient and relevant capacity for each set of risks that may arise from the purchase,” said RSG Transactional Risks Europe CEO Ian Theato. “RSG can now offer W&I and O&U under one solution while the limit of indemnity between the two products is separate.”
“Brokers prefer to negotiate with a single insurer and now RSG can provide up to £50 million in Tax Liability insurance, £100 million in W&I and now £275 million in O&U protection,” added RSG Transactional Risk Europe head of real estate Laura Potamianos.
CLS Risk Solutions director Jean Claude Domaingue mentioned that although W&I addresses the “knowledge transfer risk” that is present in a transaction, O&U is a much better option than having the seller warrant the future.
“O&U will protect buyers against a fully comprehensive list of future adverse events that could interrupt ownership or use, efficiently and effectively, without the need to construct or evidence a breach of the SPA,” the director said.
