b'Mergers & Acquisitions | Transactional Liability InsuranceOther News from Claims Data Continues to Reinforce Around the TLI Market Existing Trends Looking ForwardDespite the market turmoil caused by COVID,In respect of TLI claims, market information and several market trends from the past several yearsanecdotal evidence continue to show trends in continued. For example, the US market continued tofrequency of RWI claims that are consistent over the see the highest volume of TLI policies issued. As wepast several years, with claims made on roughly one discuss in our section on UK and Europe TLI,in five RWI policies. That trend has moved slightly US-style coverage and terms also continue tohigher for larger claims, according to data reported migrate to other markets and geographies. Thatby AIG. It is too early to tell if COVID-19 has hador said, TLI policies that are issued in Latin Americawill havea specific and measurable impact on the typically have more exclusions, higher premiums andfrequency or severity of claims. overall narrower coverage. In addition, there are farWhen claims do arise, a key focus and point of fewer insurers that will issue policies in Latinnegotiation remains the measures of damages. America, and based on country-specific risks (real orThese can vary greatly depending on the nature of perceived), TLI policies may not be available to coverthe claimsfor example, depending on whether a transactions in certain countries. claim arises from the breach of representations In addition, TLI continues to be adopted by corpo- regarding the financial statements, tax matters, rate/strategic M&A buyers as first-time users of thiscompliance with laws or material contracts or product. Alongside the overall increases in M&Acustomers (which are some of the most frequent deal activity, this has continued to fuel the growthbases for claims). and expansion of the TLI market. Looking forwardAlongside broader adoption by buyers/insureds, another area of TLI growth has been insuranceThe TLI market has demonstrated a strong connec-policies to cover more specific subject matters. TLItion and correlation to M&A activity and equity for tax, intellectual property and litigation/regulatorymarkets. At the same time, sophisticated underwrit-risks are considered by clients as part of their overallers have shown that TLI polices can be a profitable liability and risk management, even outside of M&Abusiness for insurers. Combined, these factors contexts. An example is bespoke tax insurancepoint to TLI continuing as a mainstay of M&A policies that cover specific tax riskswhether as partpractice and, increasingly, in other corporate risk of M&A deals (separate from representations andmanagement contexts. gwarranties insurance (RWI) policies) or standing on their own separate from an M&A transaction. Coverage limits for these policies frequently exceed $1 billion with several insurers providing excess coverage. These policies typically require, among other things, thorough due diligence with experi-enced third-party advisors.MAYER BROWN 31'