Chapter 10: EMEA: Case Law, Insurer Survey, Claims Handling and Tax

June 25, 2025 7 mins

Chapter 10: EMEA: Case Law, Insurer Survey, Claims Handling and Tax

At Aon, our global claims team have worked on hundreds of claims that have been resolved commercially, which gives us unique insight and experience. These insights are shared with our broking teams in our efforts to continuously improve client service and outcomes.

Case Law

Given that there are just three English court cases¹ (two of which were heard recently, in 2023), it is perhaps unsurprising that the Insurer Survey results recorded that less than 1% of claims were arbitrated, litigated, or mediated. This accords with our experience that W&I claims are resolved during commercial discussions, with only a few highly contested claims going to formal adjudication. Parties are therefore somewhat lacking in Court precedent and judicial guidance. As noted in the APAC section in Chapter 12, a recent decision in New South Wales, Australia provides helpful guidance to insurance claims experts in EMEA. At Aon, our global claims team have worked on hundreds of claims that have been resolved commercially, which gives us unique insight and experience that we lean on, but which cannot be disclosed publicly. These insights are shared with our broking teams in our efforts to continuously improve client service and outcomes.

Judicial Guidance from the Danish Court

In April 2019, it was widely reported that Liberty GTS had settled a W&I insurance claim with private equity firm FSN Capital (“FSN”) where they paid €50m for losses arising out of manipulations to the financial information provided by the Seller in connection with FSN’s acquisition of Gram Equipment, a Danish-based ice cream equipment manufacturer.

Notwithstanding the significant insurance payment, the Buyer had significant loss above the policy limit and in circumstance where fraud was alleged, were able to pursue the sellers for the shortfall. In 2019, proceedings were issued in The Maritime and Commercial High Court (“Court”) in Denmark against the sellers seeking damages of €87.5m. In November 2023, the Court determined that although members of the then day-to-day management of Gram Equipment had acted in such a way as to incur liability, there was no recoverable loss in excess of the W&I insurance payment and the claims against them were dismissed.

The Claimant asserted that the actual value of Gram Equipment at the time of transfer was €16.3m, against a warranty true value of €120m, but the Court did not concur, finding instead, based on an expert opinion, that the actual value of the company was €60.2m at the time of the transfer, and the warranty true value was €90m. The rationale for reducing the warranty true value was, amongst other considerations, that the purchase price was reached after a bidding process that considered buyers’ circumstances and assessment and therefore the “as warranted” value would need to be considered in isolation.

Therefore, since the Claimant had already been paid a W&I insurance sum of €50m, the Court held that they had suffered no loss. The Court’s judgment was not unanimous, with two out of the five judges dissenting. We understand the Insured is appealing. The takeaway, although subject to appeal, is that the court and thus insurers can consider whether the purchase price was an accurate measure of the value of the business and will interrogate the warranty true value. From a policy perspective, insurers paid €50m here, which can be contrasted with the buyer’s experience where the Court reached a different (though not unanimous) decision on valuation and the buyer’s claim failed.

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Insurer Survey and Claims Handling

Based on responses to our Insurer Survey and our own experience, the best approach for a smooth running claim is to...

1. Provide adequate information to allow insurers to analyse breach and/or loss

Once a claim notice has been submitted, for insurers to be able to confirm cover, they will likely need to request further information (RFI) and documentation. The insurers' claim adjusters who are assessing cover will not have been involved in underwriting the deal and will need to get up to speed quickly to understand the issues.
2. Provide information as quickly as possible

A claim will only be resolved if the right information is provided in a timely manner, avoiding delays where possible, as this also delays confirmation of coverage.
3. Evidence loss

Insureds will need to be ready to explain the valuation methodology they used when buying the business, alongside supporting contemporaneous documents. Both sides are likely to need to instruct accounting experts and several valuation methodologies may be considered before the parties can reach a commercial resolution on loss.
4. Ensure the process to address the claim is followed

Insureds should involve their broker as soon as they become aware of a potential claim issue that may give rise to a loss. We can help frame claim notice and ensure insurers have sufficient information to provide their preliminary views of a claim at an early stage.
5. Avoid breakdowns in communications

We cannot overstate the importance of discussions with insurers. At Aon, we remain involved throughout the claims process and will use our commercial relationships to speak to insurers to break any impasse that may arise. Equally, insureds must appreciate that the claims process will not play out in the tight deal frames akin to an M&A deal.
6. Be aware of reporting obligations for third-party demands

Insureds need to be cognizant of their reporting obligations as set out in the policy. Where a third party has made a claim against an insured, both parties may find themselves in litigation and therefore at the mercy of court time scales, which may slow coverage decisions. The insured and insurer may be aligned as they both seek to defend the claim, but permission to incur defence costs must be requested by the insured of the insurer as soon as possible.

Tax Liability Policies

In contrast to tax issues covered under a W&I policy, tax liability policies are put in place to ringfence a particular tax issue and transfer the risk to an insurer to prevent it from hampering the transaction so that the business can manage balance sheet exposure. Subject to the negotiated terms of cover, a tax liability policy will provide cover for the tax owed, interest, potential penalties, and costs related to defending the position. Given that the typical duration of these policies is 7 to 10 years and the relatively short amount of time that such bespoke tax policies have been available, both Aon and insurers’ data sets in EMEA are relatively small but growing.

Aon has a small number of claim notifications on tax liability policies. However, we are seeing defence costs being paid in some cases, which indicates that cover may be confirmed in due course, though that may take several years while the underlying claim unravels. We hope to be able to provide commentary as the case profile for this product builds on both broker and insurer side.

¹ Ageas (UK) Ltd v Kwik-Fit (GB) Ltd [2014]; Finsbury Foods Plc v Axis Corporate Capital Ltd & Ors [2023] and Project Angel Bidco Ltd (In Administration) v Axis Managing Agency Ltd & Ors [2024] EWCA Civ 446 (02 May 2024).