Deal Dynamics
Some enhancements are based on the dynamics of the transaction and therefore go on to affect the underwriting process. They might not actually affect the final policy.
| Enhancement | Explanation |
|---|---|
| No written responses to the underwriting questions | As part of the underwriting process, insurers will create underwriting questions upon their review of the due diligence materials. As standard, the insured will provide written responses to these questions before the underwriting call. This enhancement asks whether the written responses can be foregone and the questions are merely answered on the underwriting call. While most insurers will offer this as an enhancement, it will make the duration of the underwriting call exponentially longer. |
| Policy inception at signing of the acquisition agreement | The standard position for W&I policies is to sign and bind the policy at the signing of the acquisition agreement. However, some brokers still ask whether this is going to be the case. This is generally for transactions with a tight timeline and the underwriting process will be compressed into a few days. This is nearly always offered by all insurers in the market. |
| Offering clean trees during underwriting | Clean trees are clean underwriting teams comprised of a few (1-3) employees of the insurer. They remain clean when they do not work on the same transaction for different bidders or the seller (so they only work for one bidder on the transaction). This is to maintain confidentiality and ensure the underwriting process and final policy coverage is not contaminated by findings from other bidders. This enhancement is often offered free of charge and most insurers can offer up to three clean trees. The larger insurers will often be able to offer more (sometimes up to ten). |