b'Mergers & Acquisitions Transactional Liability InsuranceUSA Tale of Two MarketsIt was the best of times, it was the worst of times in the year of two thousand twenty, no story would be complete without discussing the effects of COVID-19 on the storys protago-nists. And in the transactional liability insurance (TLI) market, the impact of the pandemic in some ways was a tale of two markets.In March and April, the TLI market slowed to a near-halt in close correlation with the overall M&A market. In the few deals that were getting done at that time, uncertainty led to extensive exclu-sions for COVID-19 related issues in TLI policy coverage. This was perhaps the largest market-wide slowdown in TLI issuance since the TLI product became generally accepted as an integral part of M&A. At the time, the duration and severity of the slowdown was anyones guess. The winter of despair gave way to the spring of hope, however, and uncertainty in the TLI market gave way to acceptance of and adaptation to our most recent new normal. As deals continued to get done, underwriters tailored their approach to underwriting these risks and the exclusions from TLI coverage narrowed as well. During this time, US underwriters did not approach these exclusions uniformly and on this particular issue, there were a wide variety of approaches to underwriting. That said, one fairly consistent attribute of TLI in this market has been exclusions from coverage of PPP loans or other touch points with the US CARES Act.At the same time, some brokers and underwriters sought to expand the reach of TLI by exploring different contexts for TLIfor example, representations and warranties insurance in transactions under Section 363 of the US Bankruptcy Code. While 363 deals did not turn out to be the next frontier for TLI, these efforts were evidence of increasing flexibility and contin-ued appetite for risk in the TLI market. The end of the fourth quarter could not have been more different than the end of the first quarter. The last four months of the year saw M&A accelerate to a breakneck pace and TLI activity matched its pace. Numerous market studies by brokers and insurers noted TLI issuance was at record-high levels in the fourth quarter of 2020. This activity reflected use of TLI in deals across a broad range of valuations and industries, including enhanced use of TLI in industries such as financial services and renewable energy. One key takeaway from these results is further validation (perhaps unnecessary at this point) of TLIs permanent place in the M&A market. Underwriters and brokers faced the uncertainty and challenges of underwriting coverage alongside M&A dealmakers and found creative solutions to placing coverage in volatile markets.30GLOBAL INSURANCE INDUSTRY | YEAR IN REVIEW2020'