Representation and Warranties Insurance in Mergers and Acquisition

In today’s world we come across the phenomenon of mergers and acquisition but in layman’s term we know of this as a conglomeration or joining up of two entities of distinct or same nature or course of business. But certainly, there are reasonable technicalities that are involved in this procedure one of them being the liability and the addressing the same. Therefore, a practise of representations and warranties insurance is a new thing to be nurtured in India but it has its wide spread practise in countries like UK and the USA, therefore this type of insurance works upon the coherence principle of indemnification wherein the seller or the buyer of the business vouch to indemnify each other in case if there is a breach made on the part of representations. Therefore, depending upon the situation the agreement or the insurance can be drafted in seller side format or in buyer side format.