136 THE US-ISRAEL | Legal Review 2025/26 Carve-out transactions present another fertile ground for providing synthetic representations. Operational separation risk, standalone financial statement reliability, and transitional service dependencies create uncertainty. Synthetic representations can be tailored to address these exposures, subject to the depth of diligence performed. Synthetic R&W insurance often interacts with other transactional risk products. Tax liability insurance may address identified tax exposures that may potentially be excluded from synthetic coverage. Contingent liability policies may insure discrete known legal risks. Environmental impairment coverage may supplement environmental representations. In complex transactions, an integrated insurance program may allocate distinct risk categories across multiple policies. From a strategic perspective, synthetic R&W insurance is not merely a substitute for absent seller representations. It is an independent risk allocation mechanism capable of reshaping transaction dynamics. In competitive auctions, buyers armed with synthetic solutions can accept limited indemnity structures without sacrificing protection. In crossborder transactions, buyers can rely on insurer solvency and policy law rather than uncertain enforcement regimes. The broker’s role in synthetic placements is significant. The broker structures the representation framework, aligns diligence workstreams with underwriting expectations, negotiates policy language and exclusions, and manages competitive insurer processes under compressed timelines. Given the absence of seller alignment, technical precision in drafting and placement strategy is critical. An experienced broker effectively bridges legal, financial, and underwriting disciplines to secure optimal coverage architecture. The growth of synthetic placements reflects both market sophistication and evolving transaction realities. Insurers have developed dedicated underwriting teams with sector expertise, enabling more nuanced risk assessment. Implementation considerations Synthetic R&W insurance represents a significant evolution in transactional risk transfer. Where traditional R&W insurance supplements negotiated contractual protections, synthetic coverage replaced them, positioning the insurer as the primary bearer of unknown pre-closing business risk. Synthetic structures provide a mechanism to bridge structural gaps in indemnity frameworks in distressed transactions, public acquisitions, take-private structures, competitive auctions, fund wind-down scenarios, and cross-border deals with enforcement uncertainty. Although synthetic placements involve heightened underwriting scrutiny, elevated pricing, and careful drafting discipline, they may enable transactions that might otherwise stall due to risk allocation constraints. When structured thoughtfully and supported by strict diligence, synthetic R&W insurance is not a compromise solution. It is a strategic instrument capable of delivering transaction certainty, capital efficiency, and meaningful downside protection in complex deal environments. About the Authors Peter Teishev (Adv.) is Head of Special Risks at Marsh Israel. Prior to joining Marsh, Peter was a senior M&A attorney at a leading Israeli law firm, advising on Israeli cross-border M&A and working with leading private equity players. Marsh has developed over recent years a specialization in Israeli-nexus M&A and investments and is continuously playing a key role in obtaining and maintaining carrier support for Israeli transactions, as well as creating creative and innovative insurance solutions for complex Israeli deals. Peter’s clients include US, Israeli, and European private equity firms, multinationals, and other financial and strategic sponsors. Mobile: +972 54 6840818 Email: peter.teishev@marsh.com Alon Oren (Adv.) is a M&A and private equity specialist at Marsh Israel. Prior to joining Marsh, Alon practiced as an M&A attorney at a leading Israeli-American law firm, where he advised on domestic and international transactions, with a particular focus on Israeli cross-border deals. His work included representing strategic buyers and sellers, as well as prominent private equity sponsors, throughout all stages of the transaction lifecycle — from structuring and due diligence through negotiation, execution, and closing. Mobile: +972 54 9793424 Email: alon.oren@marsh.com
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