Aon insurance brokerage said there has been a 60 percentincrease in enquiries for warranty and indemnity insurance.

The firm said that with both private and corporate buyersfeeling an economic pinch, the current trend for W&I claims foraccounts and tax discrepancies will continue but the number willundoubtedly rise.

Aon said buyers are looking at areas where they can recoup someof the purchase price through a warranty claim, be it overaccounts, litigation, employees or stock.

In particular, the brokerage said claims are being brought aftersigning but before completion, (after the insurance has been takenout) which sellers are feeling is an attempt to reduce purchaseprices.

Sellers, Aon advised, are now looking at how insurance optionscan secure the deal with minimal cost.

It said a W&I policy can support the seller in the followingscenarios in today's economic downturn:

o PE sellers may be forced to give warranties to ensure asustainable sale price, but can insure that liability to releasefunds to investors.

o Buyers concerned about the financial worth of the seller'scovenant during a distressed sale can opt for a contingentinsurance policy if the seller defaults.

o The funding bank requires greater warranty protection thanpreviously expected so a buyer policy can be arranged to sit abovethe seller's indemnity cap.

o A selling liquidator may only give very limited warranties (intime or extent). Insurers will now consider cover for buyers toextend both time and breadth for additional comfort.

Anka Taylor, director of Aon's transaction liability unit,commented, "Never before has the M&A [merger and acquisition]community been more in need of every strategic tool available toget deals done. Deals that could create real value are frequentlyblocked for reasons that do not reflect their underlying worth.Insurance products cannot solve the myriad of economic issues thatwe now face but it may be worth having a look at them in a freshlight to see if they can assist you in getting that deal over theline."