April 15, 2020
The COVID-19 pandemic continues to disrupt operations and M&A activity for companies across all industries. Based on our experience and interactions with clients, we expect an increase in the number of representations and warranties insurance (RWI) claims. We also anticipate that underwriters will intensify due diligence to account for pandemic risks when drafting new RWI policies, and that COVID-19 related losses will be excluded from future RWI policies.
Of particular relevance are representations potentially impacted by the COVID-19 pandemic, such as those related to: customer and supplier relationships, accounts receivable, historical stability of the business, undisclosed liabilities, financial statements adequacy, compliance with laws (e.g., labor and employment), and adequacy of insurance. This shift creates new challenges for both insurers and policyholders to identify and untangle potential confounding impacts of the pandemic from other events.
How We Can Help:
- Evaluation of loss causation and quantification of economic losses
- Valuation and financial statement analysis
- Forensic accounting investigations
- Assessment of tax and GAAP compliance
- Review of litigation risk and exposure
- Privileged consulting and expert testimony
- Complex data analysis and e-discovery