Baker Tilly
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Transactional Insurance

Providing accurate and reliable analysis of the value of claims made under transactional insurance policies.

Transactional Insurance

  1. Stuart Hogan

    Stuart Hogan

    FCA

    Director

  2. Matthew R. Morris

    Matthew R. Morris

    CFA, CLP

    Managing Partner

  3. Catherine Rawlin

    Catherine Rawlin

    FCA, MAE, MCIArb

    Partner

Our forensic accountants and consultants act for both insurers and policy holders and their legal advisors to provide a clear and accurate analysis of the alleged breach of warranties and quantification of loss claimed under transactional insurance policies.

    In a broad range of sectors for our clients on every engagement, Baker Tilly’s investigative accounting and financial consulting services deliver clarity in the most complex situations. In any claim, it is often important to establish the timeline of events. Our forensic technology team can assist with the extraction and analysis of large amounts of data and documentation that can assist in understanding when certain key facts or issues become known to the relevant parties.

    Our analysis can be supported by our corporate finance division which has extensive experience in providing value added investment banking services in a wide range of industries. These include transaction and strategic advisory services, as well as financial opinion analyses, to clients with annual revenues ranging from $1M to over $1B.

    Our services

    • Initial desktop review at underwriting stage: We can provide initial high-level input to assist underwriters in preparing the questions for, and evaluating the answers from, their calls or meetings with the insured, as part of insurers’ due diligence procedures. This can include specific questions designed to identify, define and quantify key valuation issues which may assist underwriters in considering certain areas of risk within the policy.
    • Quantification of claim: Drawing on our experience in business valuation, accountancy and the quantification of losses in our corporate, litigation, insolvency and insurance practice areas, we are able to quantify damages arising from an alleged breach of warranty to put the claimant back in the same position as if no breach had taken place.
    • Review and technical assessment of claim: We can work collaboratively with clients to assist in the initial understanding and applicability of specific representations and warranties in the context of the transaction and help assess the merits and liability of a claim from a breach and quantum perspective.
    • Presentation of findings: We provide high-level advice or detailed written reports on our findings and clearly explain our analysis of complex issues. We prepare independent expert reports and provide oral testimony for ADR, Tribunal or Court in the event of a legal dispute.
    • Case management assistance: We help identify the relevant key documents and information required to develop the case strategy and provide a basis for presenting, understanding or defending a claim.

    Our work

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    Construction and infrastructure target asset purchase
    • We advised on a breach of a warranty claim under a buy-side transactional insurance policy relating to the acquisition of a number of specific construction and infrastructure contracts. The claims related to understated costs to complete provisions and overstated expected profitability on the acquired contracts, due to relevant contemporaneous financial information alleged not to have been disclosed. Our review identified that certain of the alleged undisclosed information was disclosed on the data room and our diminution in value analysis for the remaining elements of the claim was used to assist the parties in reaching commercial settlement.
    Electronics manufacturer target group
    • We were instructed as expert on an international arbitration matter involving a transactional insurance claim, where the insured claimed for breach of Management Accounts and Change of Business warranties, due to obsolete inventory and related issues which were not disclosed by the warrantors. Our role included the preparation of an expert witness report and experts’ joint statement on the quantification of loss attributable to the alleged breaches of warranty by reference to their impact on valuation on both a multiple of earnings and discounted cash-flow basis. The case settled prior to arbitration.
    Communications target company
    • We advised on breach and quantification of loss for the alleged  breach of a number of warranties in the Share Purchase Agreement, including Adequacy of IT Systems; IT Licensing Compliance; Material Adverse Change; Undisclosed Debt / Liability Warranty; and Undisclosed Contractual Dispute. The case settled at mediation.
    Engineering consultancy target group
    • We advised on breach and quantification of loss on a transactional insurance claim, where the buyer alleged that there had been breaches of the Financial Statements and Management Accounts warranties involving the alleged overstatement of WIP and deferred income and the alleged understatement of liabilities in respect of onerous long-term contracts. The insurance claim was ultimately settled without litigation.
    Forged accounts in subsidiary of target group
    • The insured, a buyer of a cybersecurity target group, identified that a local manager of one of the overseas subsidiary companies passed off a set of forged accounts as audited accounts, representing a breach of financial statements warranty. We verified the underlying facts giving rise to the claim and independently calculated loss under the policy for settlement purposes.
    Life sciences consultancy target group
    • We were advised on a claim under a transactional insurance policy relating to the undisclosed termination of a key customer contract. We quantified the diminution in value flowing from the alleged breach under the policy and prepared an independent expert report to assist in legal proceedings. The case settled following mediation.
    Equipment Manufacturing Company Buy-side Warranty & Indemnity Insurance Claim
    • We quantified losses in respect of multiple heads of claim in respect of the breach of Financial Statements warranties. The issues underlying the claims related to inventory, accounts receivable, export duties and fraudulent financial reporting.
    Finsbury Foods Group plc v Axis Corporate Capital UK Limited & Others: England and Wales High Court Decision [2023] WHHC 1559