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Prediction: Expect greater focus on warranty and indemnity policy wording and ensuring consistency throughout a policy

Transactional Liability
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Prediction

Recent case law is likely to encourage more insurers to pay keen attention to policy wording, especially in relation to the scope of the insuring clause and the policy exclusions. Insurers will want to ensure that the policy is clear as to the scope of any exclusion and the proper interpretation to be given to any defined terms. For policies which include a schedule summarising the cover offered by the policy, we expect insurers, brokers and their insureds alike to keenly scrutinise the summary against the actual cover provided during the underwriting process to ensure there is consistency between the insuring clause and the intended scope of any policy exclusion. It is also good practice to consider W&I policies alongside the share purchase agreement to reduce the risk of disputes arising later. English courts are generally reluctant to find that policy wordings contain errors.