Title Insurance (International)

Title Insurance (International)

Title insurance provides security for owners of shares and real estate assets. The main products are title to shares, title to real estate and known legal risks (often known as legal indemnities). Each policy protects against any challenge to the title on a no-fault basis and is not dependent on any warranties or indemnities provided under the M&A transactional documents. Cover supplements Due Diligence during any acquisition, restructuring or financing, and can also respond to any known risks identified during the transaction.

Reason for Title Insurance

Ryan Transactional Risk facilitates hundreds of M&A transactions each year where ownership and use of assets can become a hindrance to successful closing. Complementing W&I cover, but able to act independently of it, Title insurance is used by the owners of assets to secure a sale, and by buyers and their lenders to protect their investment and ensure returns. Some of the key drivers for Title insurance that Ryan Transactional Risk Title frequently sees:

  • Quick exit for the Seller: early availability of terms enables a buyer to proceed without delay to the transaction;
  • Clean exit for the Seller: liability for any warranties or indemnities may be limited or removed, enabling sale proceeds to be distributed immediately;
  • Concerns over Seller capacity and / or ability to discharge obligations: stand-alone cover outside the transaction documents gives the buyer full confidence;
  • Bid differentiator for the Buyer: reducing the time needed for Due Diligence or limiting any post-completion seller obligations can make the bid more attractive;
  • Full ownership security for the Buyer: comprehensive ownership protection against any challenge to title of the asset;
  • Full Real Estate use security for the Buyer: comprehensive use protection against any challenge to the property or its use;
  • Finance party or investor requirements: ability to claim directly against the insurance for specified coverage ensures that all parties to the investment are covered.

Reason for Title Insurance

Ryan Transactional Risk facilitates hundreds of M&A transactions each year where ownership and use of assets can become a hindrance to successful closing. Complementing W&I cover, but able to act independently of it, Title insurance is used by the owners of assets to secure a sale, and by buyers and their lenders to protect their investment and ensure returns. Some of the key drivers for Title insurance that Ryan Transactional Risk Title frequently sees:

  • Quick exit for the Seller: early availability of terms enables a buyer to proceed without delay to the transaction;
  • Clean exit for the Seller: liability for any warranties or indemnities may be limited or removed, enabling sale proceeds to be distributed immediately;
  • Concerns over Seller capacity and / or ability to discharge obligations: stand-alone cover outside the transaction documents gives the buyer full confidence;
  • Bid differentiator for the Buyer: reducing the time needed for Due Diligence or limiting any post-completion seller obligations can make the bid more attractive;
  • Full ownership security for the Buyer: comprehensive ownership protection against any challenge to title of the asset;
  • Full Real Estate use security for the Buyer: comprehensive use protection against any challenge to the property or its use;
  • Finance party or investor requirements: ability to claim directly against the insurance for specified coverage ensures that all parties to the investment are covered.

Coverage

Ryan Transactional Risk Title’s policy provides comprehensive coverage for losses stemming from any challenge to the title of the asset, and use of any real estate. The policy is not tied to the Share Purchase Agreement, and the insured events are designed to cover a wide range of scenarios where the insured could suffer a financial loss:

  • Ownership: the seller not holding a complete interest in the asset;
  • Authority: the seller being unable to dispose of the asset;
  • Procedure: the necessary incorporation, registration, returns or filings have not been validly completed;
  • Fraud: fraud, undue influence or duress;
  • Solvency: the seller being insolvent at the of the transaction;
  • Encumbrances: the asset is subject to options, pre-emptions, finance debt, or existing litigation;
  • Real Estate use: the title to the property is defective or not marketable because it does not have the correct planning, building or zoning permissions, is subject to legal restrictions or obligations, or it does not have the necessary easements for its use.

Policy features include:

  • No fault insurance: cover responds without a requirement for there to have been a breach of any warranty or indemnity;
  • Full Enterprise Value: losses can be covered up to the full value* of any asset protecting all aspects of any investment;
  • Extended duration: policies are not time limited and exist for the lifetime of the buyer’s ownership of the asset, including any re-structuring;
  • Core losses: legal defence costs, financial payments, and loss in value of the asset;
  • Standard losses: contractual penalties to third parties, shortfalls in loan interest or fees, re-development costs;
  • Additional losses: business interruption, rental liability or receivable rent, delay costs or abortive costs (for development or change of use real estate).

Coverage

Ryan Transactional Risk Title’s policy provides comprehensive coverage for losses stemming from any challenge to the title of the asset, and use of any real estate. The policy is not tied to the Share Purchase Agreement, and the insured events are designed to cover a wide range of scenarios where the insured could suffer a financial loss:

  • Ownership: the seller not holding a complete interest in the asset;
  • Authority: the seller being unable to dispose of the asset;
  • Procedure: the necessary incorporation, registration, returns or filings have not been validly completed;
  • Fraud: fraud, undue influence or duress;
  • Solvency: the seller being insolvent at the of the transaction;
  • Encumbrances: the asset is subject to options, pre-emptions, finance debt, or existing litigation;
  • Real Estate use: the title to the property is defective or not marketable because it does not have the correct planning, building or zoning permissions, is subject to legal restrictions or obligations, or it does not have the necessary easements for its use.

Policy features include:

  • No fault insurance: cover responds without a requirement for there to have been a breach of any warranty or indemnity;
  • Full Enterprise Value: losses can be covered up to the full value* of any asset protecting all aspects of any investment;
  • Extended duration: policies are not time limited and exist for the lifetime of the buyer’s ownership of the asset, including any re-structuring;
  • Core losses: legal defence costs, financial payments, and loss in value of the asset;
  • Standard losses: contractual penalties to third parties, shortfalls in loan interest or fees, re-development costs;
  • Additional losses: business interruption, rental liability or receivable rent, delay costs or abortive costs (for development or change of use real estate).

Key Features

Ryan Transactional Risk’s Title underwriting typically has:

  • No underwriting fee;
  • Nil retention;
  • Ability to cover the full Enterprise Value up to maximum line;
  • Unlimited policy duration for the length of the insured’s ownership;
  • Flexibility to structure alongside W&I coverage or sit independently;
  • Wide appetite for any known risks identified in Due Diligence.

Key Features

Ryan Transactional Risk’s Title underwriting typically has:

  • No underwriting fee;
  • Nil retention;
  • Ability to cover the full Enterprise Value up to maximum line;
  • Unlimited policy duration for the length of the insured’s ownership;
  • Flexibility to structure alongside W&I coverage or sit independently;
  • Wide appetite for any known risks identified in Due Diligence.

Excess Fundamental Cover (International)

Title insurance can also be used to provide additional capacity to fundamental warranties cover. This can sit in excess of Ryan Transactional Risk’s W&I or also any wider market transaction structure. The product is focused on:

  • Delivering quick and efficient deployment of capacity;
  • Providing ‘light touch’ underwriting mirroring underlying cover;
  • Increasing limits for breach of fundamental warranties to the full Enterprise Value up to maximum line.

Excess Fundamental Cover (International)

Title insurance can also be used to provide additional capacity to fundamental warranties cover. This can sit in excess of Ryan Transactional Risk’s W&I or also any wider market transaction structure. The product is focused on:

  • Delivering quick and efficient deployment of capacity;
  • Providing ‘light touch’ underwriting mirroring underlying cover;
  • Increasing limits for breach of fundamental warranties to the full Enterprise Value up to maximum line.