Representations and warranties together with indemnification mechanisms are the primary way of hedging the risks arising from the acquisition of a target by an acquirer. In the aftermath of the last financial crisis, a new way of hedging these risks has emerged in the developed economic markets, which is new to the Slovenian legal and economic environment. Insurance companies have started to distribute Representations and Warranties Insurance (hereinafter: RWI) on the market, where the insurance policyholder transfers the risk of breach of the contractually given representation and warranties on the part of the seller to the insurer. The aim of this master thesis is to review this new way of risk hedging and to examine the impact on the process of acquiring a capital company, separately for the acquisition of a private and public company. The core of this thesis thus consists of a detailed presentation of the RWI as distributed by insurance companies. It then focuses on key problems of the insurance industry and relates them to the RWI. The core of this thesis concludes with a presentation and impact of a new risk management approach in the acquisition of a public company.
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