Aon Clients Recover More Than $3B in Transaction Liability Insurance Globally as Claims Activity Continues to Evolve

Key Terms

transaction liability insurance financial

Transaction liability insurance is a policy that protects buyers or sellers in a merger or acquisition against unexpected financial losses tied to facts or promises made about the business during the deal. It works like a safety net that can replace or reduce holdbacks and legal fights, making deals closer to cash in hand and lowering the chance that unknown problems will create surprise costs for investors.

representations and warranties (r&w) financial

Representations and warranties are the factual promises a seller and sometimes a buyer make in a deal agreement, stating key truths about the business, assets, liabilities and legal standing. They matter to investors because they allocate risk — like a seller guaranteeing a used car’s condition — and determine whether a buyer can seek compensation or delay closing if those assurances prove false, affecting deal value and future liabilities.

warranty and indemnity (w&i) financial

Warranty and indemnity (W&I) refers to the seller's written promises about a business (warranties) and the seller's obligation to compensate the buyer if those promises turn out to be false or if specified losses occur (indemnities). Think of warranties as promises about the state of the business and indemnities as the safety net that pays for problems; investors care because W&I limits deal risk, affects price, and determines who bears unexpected costs after a transaction.

contingent risk insurance financial

Contingent risk insurance is a policy that pays out only if a specific uncertain event happens later—such as a lawsuit, regulatory penalty, or contract dispute—and that event triggers a financial obligation. For investors it matters because the coverage can shield a company from sudden, large cash losses tied to those future events, like a safety net that keeps the balance sheet steadier and preserves deal value and earnings predictability.

valuation multiples financial

Valuation multiples are simple numbers that compare a company’s market price to a key business figure — for example price per dollar of earnings, sales, or cash flow — like a price per square foot for a house. Investors use them as quick checklists to see whether a stock looks cheap or expensive compared with peers or its own history, helping prioritize research and buy/sell decisions, though they don’t tell the whole story on their own.

financial statement breaches financial

Financial statement breaches occur when a company’s published numbers are either inaccurate or fail to meet financial promises written into contracts (like loan covenants). For investors this matters because such breaches can trigger penalties, force lenders to demand immediate repayment, or undermine trust in management—effects that can quickly reduce a company’s value, limit its ability to borrow, or cause sudden stock price moves, much like a failed home inspection revealing costly problems.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

• Record year in 2025 for Transaction Liability Insurance recoveries in North America; Claims notifications in EMEA and APAC rise year-over-year
• Data quality, analytics and proactive partnership remain critical to reducing claims exposure and protecting deal value

DUBLIN--(BUSINESS WIRE)-- Aon plc (NYSE: AON), a leading global professional services firm, today released its 2026 Global M&A and Transaction Solutions Claims Study, which highlights the continued evolution of the global M&A insurance landscape across Representations and Warranties (R&W), Warranty and Indemnity (W&I), Tax and Contingent Risk insurance.

Aon’s study is based on proprietary data from nearly 2,000 claims and more than $3B in recoveries secured globally across transaction solutions products since inception, with record recoveries in North America and increasing claims activity across EMEA and APAC.

“The global claims environment is evolving rapidly, as rising claim frequency, increasing severity and shifting notification patterns impact the M&A insurance landscape,” said Stephen Davidson, Global Head of Transaction Solutions Claims for Aon. “At the same time, the market continues to demonstrate the value of high-quality underwriting data, sophisticated analytics and close partnership between insurers, brokers and clients to proactively manage risk before a deal is signed and achieve fair and efficient outcomes when claims do arise.”

Significant year-over-year increases in R&W and W&I insurance payments

The report reveals that in 2025, North American clients secured more than $1B across transaction solutions policies, including more than $440M from R&W insurance alone.

Larger claims are becoming more common in North America, with a growing proportion of losses exceeding 60 percent of policy limits and an increasing number reaching full limits. Approximately four percent of claims allege losses greater than $100M, while claims based on valuation multiples accounted for 68 percent of total paid losses in 2025.

Median R&W claim payments exceeded $8.2M in 2025, up from $5.5M in 2024, reflecting continued complexity in post-close disputes and increasing sophistication in the use of transaction risk insurance solutions.

In EMEA, claims activity continues to accelerate; notifications increased from 70 in 2024 to 119 in 2025. Claim frequency is also increasing, with insurer data showing a notification submitted on 21 percent of the policies placed across the market in 2023. Earlier notifications emerged as a trend in 2025, with a notification submitted on 9.5 percent of Aon-placed policies by December 31, 2025, reflecting maturing underwriting years and claims being filed across a broader portion of the policy lifecycle.

In APAC, there is a growing body of W&I and tax notifications across Australia, New Zealand and the broader markets in Asia, although the claims rate remains varied as the product matures in some regions.

Core drivers of claims

In terms of North American breach trends, compliance with laws remains the most frequent breach type, accounting for more than 20 percent of notifications. Material contracts, financial statements and tax breaches each represent more than 10 percent of notifications. Financial statement breaches continue to account for the highest proportion of paid losses, representing 38 percent of total losses, while intellectual property-related claims grew from approximately five percent of all losses between 2019-2024 to roughly 10 percent of total losses in 2025.

The main notification driver across EMEA is tax, which accounts for more than 20 percent of notifications; given the routine nature of audit activity in the region, this is expected and does not drive paid losses. Financial statement breaches account for a similar percentage of notifications but are the main driver of loss. Across APAC, disclosure continues to be the most common breach type.

Other key findings from the report include:

• In North America, fifty-one percent of claims are now filed more than 12 months after closing, continuing the trend toward later reporting within the policy period.
• Eight-figure claims represented approximately 41 percent of North American payments in 2025, compared to 27 percent in 2024.
• Claims activity continues to increase as the use of R&W and W&I grows and buyers become more familiar with how the policy can protect against deal risks undiscovered in the due diligence process.
• Tax insurance remains a low-frequency claims solution, though more than $350M has been recovered for clients in North America through negotiated resolutions with tax authorities across different types of claims.

In its seventh year, Aon’s annual Global M&A and Transaction Solutions Claims Study is the premiere indicator of how the firm’s historical claims data can assist clients, advisors and insurers on their next deal. Read the full study here.

ENDS

About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries with the clarity and confidence to make better risk and people decisions that protect and grow their businesses.

Follow Aon on LinkedIn, X, Facebook and Instagram. Stay up-to-date by visiting Aon’s newsroom and sign up for news alerts here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260603600676/en/

Media Contacts
Prosek Partners
Pro-AMATS@prosek.com

mediainquiries@aon.com
Toll-free (U.S., Canada and Puerto Rico): +1 833 751 8114
International: +1 312 381 3024

Source: Aon plc