Skip to content
Advisor Login
Home Insights The Seller’s Role in a Buyer’s Reps & Warranties Insurance Claim

The Seller’s Role in a Buyer’s Reps & Warranties Insurance Claim

11/29/2016

Business Meeting

The idea that seller is “fully removed” from any post-closing liability as a result of an R&W insurance policy is incorrect. Unless the deal is structured as a “no survival” transaction, the seller commonly retains liability to the buyer with respect to satisfying a portion of the retention (usually funded through an escrow) as well as for claims of breach of fundamental representations that occur during the indemnity period that surpass the insurance limits.  Further, apart from the underlying merger or acquisition agreement, the seller is potentially liable for common law fraud.  Given this common structure, parties looking at R&W insurance should consider what, exactly, the seller’s role will be in a claim and what obligations the buyer will have under the policy.

Related Insights

Overhead view of two business persons in the lobby

Announcements, News

Vanbridge and GreensLedge Announce Joint Venture and Launch of Alternative Letter of Credit (ALOC) Facility

Posted on 12/05/2023

GreensLedge and Vanbridge announced today the formation of their joint venture company, Convergence Point Solutions (CPS), and the launch of its Alternative Letter of Credit (A...

Read Post

Announcements

Vanbridge Proudly Supports the 38th Annual Answer the Call Gala N.Y. Police and Fire Widow’s & Children’s Benefit Fund

Posted on 10/23/2023

We are once again proud to support the 38th Annual Answer the Call Gala, benefiting the New York Police and Fire Widows’ & Children’s Benefit Fund! This extraor...

Read Post

Articles

Transactional Risk Insurance – Helping Private Equity Unlock Value, Even Without Transactions

Posted on 09/15/2023

M&A activity has slowed down in 2023, but that doesn’t mean PE firms should adopt a ‘wait and see’ approach. They can actively seek value within thei...

Read Post