In their article linked below, Woodruff Sawyer provide a good overview of different claims scenarios following M&A transactions and how they impact differently on W&I and D&O insurance.
I agree with the conclusion that companies and their directors should not rely on their D&O insurance as sufficient cover, not only because some policies might include relevant exclusions but mainly because W&I cover provides different protection.
While the article is focused on the US market, this especially holds true for other jurisdictions with different typical claims scenario. In Germany, for example, the typical post-M&A claim will be one brought by the buyer against the seller. With buy-side protection, buyers will instead have a direct action against their W&I insurers. If this goes through, there will typically be no recourse against the buyers‘ directors. And due to respective limitations and waivers, there will also be no claim against sellers or its directors (but for fraud where sellers‘ D&O will not respond).
Another advantage of W&I insurance is that typically the cover takes away a risk from the D&O side. At the same time, with the rise of W&I insurance, the post-M&A disputes landscape is significantly changing, especially requiring insurers to build up respective expertise and claims handling capabilities. This will be part of the next stage of development in this maturing market.
With the growing popularity of RWI it is worth examining which situations are covered by D&O insurance versus RWI in the context of a private company purchase, and which should be covered by both. Incidentally, in some situations, a good RWI policy with a robust limit is actually another way to protect the directors and officers of both the buyer and the seller.