Frequently Asked Questions
What does Euclid Transactional need in order to provide terms for RWI?
All submissions should include the transaction total enterprise value, limit request, description of coverage being sought, identity of the parties to the transaction and the identity of the target business.
The ideal submission should include as much information on the target business as is available (which may consist of marketing materials such as a bankers’ book, confidential information memorandum or management presentation, or in the absence of such marketing materials, a description of the target’s business and a link to its website (if applicable)), a copy of the target’s financial statements (audited financials are preferred, but unaudited companies may also receive a non-binding term sheet for insurance), and the latest draft of the transaction agreement (merger agreement, securities or membership interest purchase agreement, etc.) through which the transaction will be consummated.
What/who is our paper?
Our mix of highly-related insurance carriers include affiliates of Swiss Re (North American Capacity Insurance Company; AM Best Rating of A+ (Superior)), Aspen (Aspen Specialty Insurance Company; AM Best Rating of A (Excellent)), Hudson (Hudson Excess Insurance Company; AM Best Rating of A (Excellent)), Westfield (Westfield Specialty Insurance Company; AM Best Rating of A (Excellent)), Zurich North America (Steadfast Insurance Company; AM Best Rating of A+ (Superior) and SCOR (General Security Indemnity Company of Arizona; AM Best Rating of A (Excellent)), CNA.
What is our minimum deal size for RWI?
We have underwritten transactions with enterprise values ranging from a few million to tens of billions of dollars. While we do not have a minimum deal size, transactions with values below $25,000,000 often do not meet our minimum premium or diligence process requirements and may be less likely to receive a non-binding term sheet for Representations & Warranties Insurance from us. However, we encourage the submission of opportunities of all sizes in order to receive more tailored feedback from us.
What is our minimum limit?
Our minimum limit is typically $5,000,000, although we have written smaller limits on a limited case-by-case basis.
Are there any industries we will not underwrite?
We will not underwrite insurance policies for businesses that have more than 30% of exposure from thermal coal (subject to certain exceptions) or businesses involving marijuana exposure in the United States (unless the business involves only “ancillary” exposure, subject to certain additional terms). Additionally, we will not underwrite insurance policies for sanctioned or other excluded countries or individuals, “named insured” parties that are domiciled in geographies where we do not have insurance paper capacity, and businesses that fail to respect indigenous people’s rights and/or engage in torture, degrading or inhumane treatment, slavery, murder, and unlawful killing.
However, we encourage potential insureds to submit all potential transactions seeking Representations & Warranty Insurance to our attention at [email protected] so that we may evaluate your opportunity and provide a more tailored response.
What is your minimum/maximum RWI retention?
Retentions typically range from 0.5% to 1.0% of the enterprise value of the acquisition target, depending on overall deal size, often dropping down to a smaller amount (usually 0.5% of the enterprise value) after a specified period of time.
Our minimum retention for Representations & Warranties Insurance policies is typically around $300,000, but we have agreed to smaller retentions on a limited case-by-case basis. There is generally no ‘maximum’ retention but a larger retention (as a percentage of the overall enterprise value of the acquisition target) will result in some discount in the pricing of our premium.