The underwriting process for transactional risk insurance is a lot smoother today than it was in the early days of the product, industry experts said.

In the past, deals were sometimes delayed while parties underwent the rigorous review and conscientious drafting of these mostly manuscript insurance policies.

“A decade ago, someone would think of the coverage as a bit of an afterthought. You'd come in like a SWAT team and try to write the coverage quickly,” said Carl Metzger, a partner in Goodwin Procter L.L.P.'s Boston office who focuses on risk management and insurance.

By contrast, “brokers today have gotten better at jumping on fast-paced situations, while the carriers have gotten better at promptly underwriting the coverage in an efficient, intelligent way so they don't hold up the deal,” Mr. Metzger said.

That said, underwriting a representations and warranties insurance policy remains a two-step process, taking anywhere from a week to 10 days, sources said.

First, “the underwriter makes sure the proper due diligence has been done” by carefully reviewing all documents involved in the transaction, said Henry Jennings, a senior vice president at Lockton Cos. L.L.C. in New York.

This review is followed by a series of conference calls involving underwriters and all pertinent parties to the transaction.

For example, “if it's a sell-side policy, underwriters will work primarily with the sellers. If it's on the buy side, the underwriters deal with the buyer and the buyer's advisers,” Mr. Jennings said.

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Oftentimes, underwriters will ask “detailed questions about the types of risk inherent in the industry, such as patent infringement for a tech company,” said Craig Schioppo, transactional risk practice leader at Marsh Inc. in New York. Or “they may talk to current management about the history of the company” being sold, he said.

All transactional risk insurance policy buyers are required to pay a nonrefundable underwriting fee ranging from $10,000 to $50,000, depending on the complexity of the transaction being covered, sources said.

“This separates the tire-kickers from the serious buyers,” said Alex Jezerski, president of RT ProExec in Bloomfield, Conn., a wholesaler that specializes in transactional risk insurance products.

“Once we finish the diligence review, the underwriters issue a base template policy tailored to respond to the purchase agreement,” said Mr. Jennings. “The policy is issued on the date of the closing and the premium is paid at closing. They sign a no-claim declaration saying they are unaware of any breaches at close.”

Buy-side policies typically are in place for six years, whereas sell-side policies mirror the survival period on the purchase agreement, Mr. Jennings said.

As underwriters gain greater experience with the types of claims that trigger representations and warranties insurance policies, they have become more flexible in negotiating coverage terms, said Peter Rosen, a partner at Latham & Watkins L.L.P. in Los Angeles.

“These policies are highly modifiable, manuscripted to match the deal structure,” Mr. Rosen said.

“People in the M&A business don't want to wait a month to get a policy in place. As more people have used it and they've seen how it's worked, we now have a history of getting these deals done very quickly. We can now do it in less than a week,” said Jay Rittberg, vice president for mergers and acquisitions insurance at American International Group Inc. in New York.