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

Each M&A transaction is different – and the same goes for the issues that give rise to claims made under transactional insurance policies; no two are the same. They each are the result of a unique set of circumstances that require detailed investigation, clarity of understanding and explanation and thorough quantification.

    Baker Tilly’s experienced forensic accountants and consultants work closely with insurance, legal and corporate professionals to provide detailed analysis of the value of Representations & Warranties (R&W) and Warranty & Indemnity (W&I) insurance policy claims.

    Overview

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    Baker Tilly’s skilled forensic accountants are experienced in assisting stakeholders in assessing the merits, scale and liability of a transactional insurance claim from a valuation, accounting standards and financial perspective. Our team works closely with insurance, legal and corporate professionals to establish the relevant facts surrounding an insured M&A transaction and to independently and objectively quantify damages claimed under transactional insurance policies.

    Building on our background in business valuation, insurance claims and litigation matters, Baker Tilly’s specialists are well-placed to assist clients in understanding the impact on valuation of a breach of warranty in a shareholder agreement and to navigate the insurance claim process.

    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.

    Our services

    • Desktop review at underwriting stage - We 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.
    • Case management assistance - We help identify the relevant documents and information required to develop the case strategy and provide a basis for presenting or defending a claim.
    • Initial review and technical assessment of claim - We 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 valuation, accounting standards and financial perspective.
    • Quantification of claim - Drawing on our experience in business valuation, the quantification of losses in our corporate, litigation, insolvency and insurance practice areas, and our expert witness services, we are able to independently quantify damages arising from an alleged breach so as to put the claimant back in the same position as if no breach had taken place.
    • Presentation of findings - We provide verbal or short written analysis of our findings, produce either high-level or detailed written reports as required or provide expert witness reports and oral testimony for ADR, Tribunal or Court in the event of legal dispute.

    Our work

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    Fairness Opinion Reviews
    • We have extensive experience in cases involving claimants within a class action where there is an objection to the price and disclosures associated with the acquisition of stock by majority shareholders in publicly listed US companies. We undertake a detailed review and appraisal of the Fairness Opinion involved in the transaction and work with lawyers representing the class action.
    Electronics Manufacturing Company Buy-side Warranty & Indemnity Insurance Claim
    • We were instructed as the Expert Witness for the Defendants on an international arbitration matter involving a claim under a W&I insurance policy. The insured claimed losses under Management Accounts and Change of Business warranties, for inventory-related issues which were not disclosed to the buyer. Our role included the preparation of an expert witness report and Experts’ joint statement to quantify the breaches by reference to their impact on valuation on both a multiple of earnings and discounted cash-flow basis.
    Communications Company Buy-side Warranty & Indemnity Insurance Claim
    • We assisted Insurers and their legal advisors in evaluating whether or not a breach of warranty had occurred from a quantum perspective and also in quantifying the loss for each alleged breach of warranty. These included Adequacy of IT Systems; IT Licensing Compliance; Material Adverse Change; Undisclosed Debt / Liability Warranty; and Undisclosed Contractual Disputes.
    Construction Company Buy-side Warranty & Indemnity Insurance Claim
    • We advised Insurers and their legal advisors on the quantification of loss under a W&I insurance policy in respect of undisclosed construction risk documents for projects acquired under an Asset Purchase Agreement.
    Pharma-Tech Buy-side Warranty & Indemnity Insurance Claim
    • Our role involved the quantification of losses under a W&I insurance policy. The claim related to a breach of warranty where the status of new software upgrades for existing customers was alleged to be different to that which was warranted.
    Retail Company Buy-side Warranty & Indemnity Insurance Claim
    • We assisted Insurers and their legal advisors in quantifying losses in respect of a breach of Employment warranty, where employee costs were claimed to have been understated.
    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.

    Engineering Company Buy-side Warranty & Indemnity Insurance Claim

    • We calculated losses relating to of the Management Accounts and Financial Statements warranties, where reported profitability and balance sheet assets were claimed to have been overstated due to issues involving revenue recognition, understated loss provisions and overstated inventory and work-in-progress.
    Rail Transportation Company Buy-side Warranty & Indemnity Insurance Claim
    • We advised Insurers and their legal advisors on the quantification of loss under a W&I insurance policy in respect of an alleged breach of Material Contract warranty.