Deal Point: A corporation is in the process of divesting a non-core asset. The divestiture will involve separate financing being put in place. The bank doing the financing has required representations and warranties from the divesting organization relative to certain key operational issues. The divesting corporation does not wish to retain any liability after the divestiture occurs and is unwilling to retain any indemnity obligation although it has conducted a thorough due diligence in connection with the divestiture.

Transactional Insurance Solution: The divesting corporation purchases a Reps & Warranties Insurance policy to insure the key representations and warranties that the bank has requested.