As geopolitical tensions continue to escalate in the Middle East, buyers relying on representations and warranties insurance (RWI) should be aware of how insurers may respond. RWI insurers have historically reacted quickly to major political and economic events that could give rise to claims exposure. For example, insurers rapidly introduced new exclusions and underwriting scrutiny in response to the COVID‑19 pandemic, the Russia‑Ukraine conflict and global tariff disruptions.
RWI insurers take this approach because RWI policies offer exceptionally broad coverage across an M&A target’s operations. As a result, carriers seek to avoid covering losses that stem from major, widely‑known geopolitical developments that could create systemic or unavoidable impacts on a target’s business.
In line with this trend, we expect insurers to begin scrutinizing, and in some cases excluding, risks associated with the developing U.S./Israel/Iran conflict. This may take the form of targeted exclusions, heightened diligence on supply chain and operational exposures or narrower coverage for impacts connected to regional instability.
WTW is engaging with RWI insurers on behalf of clients and their advisors to ensure that policy terms remain as broad as possible despite the evolving conflict. We are continuing to monitor the insurers’ positions and advocate for tailored, deal‑specific solutions that minimize coverage erosion.
If you would like to discuss how these developments may affect a pending or upcoming transaction, or RWI placement strategy, WTW’s transactional insurance team is available to assist.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
