MOFS Guide to Legal Indemnity Insurance - Flipbook - Page 31
Title to Shares for Corporate Transactions
To enable us to approach the market and provide quotations, we need
a list of individual properties, their values and addresses. We require the
client details but, for the purposes of an initial indication, we are under no
obligation to inform insurers if their details are confidential.
The Title Insurance market has responded to the general demand for cover
for Title to Shares and policies are available from various insurers. Cover is
available in deals even where there is no transfer of Real Estate and many
potential issues can be covered, even where they are known about and
identified in advance.
MOFS and most insurers we work with are happy to sign an NDA if
required. We can usually obtain sample wording and an initial indication
from basic information. A schedule of properties with individual values
and addresses on an Excel spreadsheet is the most useful format as it
allows simple identification of the higher value assets and calculation of
the total amount. To obtain a firm indication we need to provide insurers
with access to the title information for the properties, so they can take their
own sample. Providing the insurers and MOFS access to a dataroom is the
easiest method. Alternatively, we can request insurers choose a selection
of properties for which they require additional information, and these can
then be submitted in the traditional manner.
All the insurers we use are financially strong with an ‘A’ rating or higher
from the main rating agencies.
Cover is generally available for situations where:
• The seller does not have the right (legal or otherwise) to sell the shares.
•The seller does not have the legal right to, or ownership of, shares in
• The shares are encumbered in some way, for example through a charge.
• A third party has, or claims to have, superior legal title to the shares.
•Title to the shares may be defective due to improper documentation
relating to the registration of the shares.
•A company being acquired has no legal or benefiting right to the
shares in the company to whom title to the relevant Real Estate in
a deal is vested.
Insurers will always ask for:
• Information as to where the drive for cover is originating and why.
Any relevant information regarding Real Estate linked to the deal,
including quantity, values and whether separate risks are being covered
in respect of the same.
A copy of any corporate DD, property DD (if being carried out – see
previous page) and the SPA.
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