Sell-Side Transaction Liability Private Enterprise (TLPE) Insurance
An insurance product designed to protect the Seller and Buyer in an M&A transaction for a breach of the Seller reps and warranties. TLPE is the only such program available for the sub $30M enterprise value sector.
M&A professionals worldwide are using an insurance policy known as Representation and Warranty (R&W) to transfer risk from the deal parties to an insurance company. This tool has become indispensable in more transactions than ever before, and yet, it has been unavailable to the vast number of M&A deals where the enterprise value is below $30M. That is until now. CFC Underwriting has launched TLPE, a Sell-side R&W policy exclusively for the underserved, “Main Street” market.
- TLPE provides cover for defense costs arising from the claim of an inaccuracy in a representation or warranty.
- Provides up to 100% of the enterprise value to pay indemnity to the buyer in the event of a breach.
- Locks in the return of sale proceeds and provides a clean exit as the indemnity exposure is covered.
- Expedites the sale by getting the indemnification issue “off the table”.
- Eases concerns about collecting on a Seller’s indemnification
- Buyer enjoys the benefits of R&W protection without the cost
- Preserves the relationship with the Seller. In the event the Seller is remaining with the company, the Buyer pursues the Seller’s insurer, and not the Seller personally in the event of a breach.
- Expedites the sale by getting the indemnification issue “off the table”
"“From our perspective, R&W is for Wall Street. We wanted TLPE to be for Main Street”"
Underwriting & Placement Process
(3 days from submission to binding)
- Complete, sign and date CFC TLPE application
- Provide latest annual and YTD financial statements (enables applicant to skip Q.6.13 on the application)
- Within 3 business days, proposal issued
- Policy Bound upon receipt of:
- Signed No Claim Declaration (embedded in proposed policy)
- Copy of signed purchase agreement
- Confirmation deal closed
- Payment of premium
Request a Quote
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