ORLANDO, Fla. — Representations and warranties insurance now plays a larger role in facilitating mergers and acquisitions, panelists said Tuesday during a session at the Professional Liability Underwriting Society's 26th international conference.

During the discussion, Jeffrey Cowhey, president of New York-based managing general underwriter Ambridge Partners L.L.C., said the coverage helps assuage fears of both buyers and sellers during complex M&A deals.

For buyers, the coverage acts as an “information dump” that limits surprises. For sellers, the product helps move indemnity from them to an insurance product, Mr. Cowhey said.

The coverage also helps fill in gaps left by traditional directors and officers insurance, said Jay Rittberg, vice president and head of mergers and acquisitions insurance for New York-based American International Group Inc.

“D&O (insurance) may have exclusions for things that you want covered,” Mr. Rittberg said. “It's about shifting unknowns from the buyers and sellers to the insurance market.”

Matt Heinz, New York-based senior vice president at Aon P.L.C., said the number of insurers offering representations and warranties coverage has grown markedly in the past five years.

“The market is roughly double in regards to carrier representation since 2008,” Mr. Heinz said. The coverage has evolved from relatively straightforward items such as physical inventory to include patents and other intellectual property.

“We can now get some pretty hairy risks and heightened exposures covered,” Mr. Heinz said.

Ira C. Weisman, New York-based managing director at Cerberus Operations & Advisory Co. L.L.C., said representations and warranties coverage is a good way to expedite M&As.

“The beauty of this product is that it allows you to remove representations as a possible bone of contention for a deal,” Mr. Weisman said.

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