Transaction liability insurance has become a valuable tool for M&A deal facilitation employed by both private equity firms and strategic buyers and sellers.
CFC has one of the largest dedicated transaction liability underwriting teams in the market, made up of former M&A attorneys, investment bankers and chartered accountants with real-world experience handling transactions of all sizes. We take a proactive approach towards addressing gaps in the market, creating innovative and commercially focused solutions for SME deals.
Available to buyers & sellers offering cover for representations & warranties, contingent tax, and other M&A liabilities
Insures sellers of small and micro businesses against the risk of financial loss as a result of an inaccuracy in a representation or warranty
We estimate there to be nearly half a million SME M&A transactions a year globally, which represents the next sector of growth. We are proud to have developed an award-winning solution specifically for small business sellers to help protect the full value of their deal.
Why does transaction liability insurance exist?
Transaction liability insurance is a valuable tool to help buyers and sellers facilitate mergers and acquisitions (M&A). It means the sellers carry the risk for any liabilities which occurred when they owned the company. If these issues are then discovered after the transaction is completed and causes financial loss, the seller could be found to be financially responsible.
What are representations and warranties?
Representations and warranties are statements of fact. In an M&A transaction, the seller will represent and warrant certain facts about the company which they are selling. An indemnity is a legal promise to be responsible for a third party’s loss if a certain event is to occur.
Who should buy representation and warranty insurance?
Representation and warranty insurance is available to both buyers and sellers in private M&A transactions, and is most often purchased by the buyer.
What other solutions does CFC offer?
CFC also offers solutions for transatlantic M&A, portfolio acquisitions and secondary fund acquisitions.
Is transaction liability insurance available to sellers?
CFC recently launched a first-to-market policy which provides small business sellers with cover for indemnity and defence costs resulting from a breach of sale contract. Learn more about how M&A insurance can help sellers facilitate their deal here.