TrueValue M&A Network
Warranty & indemnity specialists
Warranty and indemnity insurance moves the risk of a warranty claim from the seller to an insurer, letting sellers walk away clean and buyers claim against a policy rather than against people who may have spent the money.
Warranty & indemnity specialists
Verified and featured professionals are listed first. Refine by location, sector or deal size.
What warranty & indemnity specialists do
A W&I broker scopes the policy against the SPA and the diligence, approaches insurers, negotiates the premium, the retention and the exclusions, and manages the underwriting process — which requires the insurer to review the due diligence reports and the disclosure. Buy-side policies (the usual form) let the buyer claim directly against the insurer; sell-side policies cover the seller’s liability.
W&I has moved down-market in recent years and is now seen on transactions well below the sizes it started at, particularly where sellers are retiring and want no tail.
When to engage them
Once heads of terms are agreed and the diligence scope is set — the insurer will underwrite against the diligence, so its scope and the policy’s coverage need to be planned together. Late engagement means exclusions for anything that was not diligenced.
Usually active at
- In due diligence
- Legal documents and completion
What they typically help with
- Scoping W&I cover against the SPA and the diligence
- Approaching and negotiating with insurers
- Premium, retention, exclusions and enhancements
- Managing the underwriting process and the disclosure review
- Claims handling after completion
Questions to ask before you engage
- 1. Is this deal a size and type insurers will write, and what premium and retention would you expect?
- 2. What will be excluded, and what could be done in diligence to narrow the exclusions?
- 3. How long does underwriting take, and what does the insurer need to see?
- 4. How are you paid, and are you independent of the insurers?
- 5. What has the claims experience been on policies you have placed?
How warranty & indemnity specialists are paid
The broker is usually paid by commission from the insurer. The policy itself carries a premium (a percentage of the limit purchased), a retention (an excess the buyer bears before the policy pays) and the insurer’s underwriting fee. All three are negotiated.
How TrueValue fits alongside
TrueValue’s due diligence software keeps the diligence reports and the evidence on every item in one place, which is what a W&I insurer underwrites against, and the structure summary states the consideration lines the policy limit is usually set as a proportion of.
Frequently asked
Who pays for warranty and indemnity insurance?
- It is negotiated. On a buy-side policy the buyer is the insured and often pays, sometimes with a contribution from the seller reflected in the price; on a seller-initiated process the seller may pay or share the cost.
Does W&I cover everything in the SPA?
- No. Known issues, matters disclosed, forward-looking statements, certain tax matters and anything not diligenced are typically excluded. The policy is a complement to diligence, not a substitute.
Is W&I available on small deals?
- Minimum premiums make it uneconomic below a certain size, though that threshold has fallen. Ask a specialist whether your deal is within range.
Listings in the TrueValue M&A Network are provided for information. A listing is not an endorsement or a recommendation, and TrueValue does not guarantee any professional’s performance. You must carry out your own due diligence before engaging anyone, verify regulated status independently with the relevant regulator, and seek qualified legal, financial and tax advice where appropriate.