Representations & Warranties Insurance

Target: Companies involved in the purchase or sale of a business with a purchase price of over $35 million.
As one of the fastest growing segments of the insurance industry, representations & warranties coverage insures loss caused by a misrepresentation made to a buyer of a business. The policy may insure the seller or the buyer. Seller-based coverage allows a private equity seller, for example, to distribute substantially all of its sale proceeds to investors. Buyer-based coverage allows a buyer to enhance its bid by reducing escrow or indemnity demands and/or expedites financing.
Capacity: $35 million
Minimum premium: $250,000
Minimum retention: $500,000

Policy Features

  • Covers all reps & warranties made both at the time of contract inception and the time of closing
  • Will generally follow the indemnity provisions with respect to any “materiality scrape”
  • Expressly provides for payment of loss before final adjudication in particular circumstances
  • All polices are underwritten in-house
  • All policies are assignable