Is it a legal requirement to have warranty & indemnity insurance?

Warranty & indemnity insurance is not a legal requirement. But, if you are buying or selling a business, having a policy in place provides peace of mind that any misrepresentations will not lead to significant financial cost - making for a more attractive proposition.

How long are you liable after selling your business?

Once you have sold a business, claims against you can be made up to six years post-sale.

How does a W&I policy provide protection?

If a warranty is proven to be inaccurate, even if by accident, as the seller you’ll be responsible for reimbursing the buyer for the loss they have suffered as a result. A W&I policy will help protect your business sale proceeds and provide cover for defence costs arising from the claim of an inaccurate warranty.

What are the benefits of W&I insurance?

The obvious benefit is the removal of the financial risks associated with a claim against you. However, there are other, less obvious benefits. Maintaining W&I insurance may help you avoid the need for escrow, freeing up the sale proceeds. It provides peace of mind for the buyer, as they know valid claims will be paid. Making your business a more attractive proposition.

Can warranty & indemnity insurance be purchased by the buyer in a mergers and acquisitions deal?

Yes, warranty and indemnity insurance can be purchased by the buyer in a mergers and acquisitions deal. The advantages of doing so are: Avoids risk of the buyer potentially having to bring a warranty claim against a seller who continues to be employed by the business after completion, therefore protecting the relationship with valuable staff as a claim is instead made under the policy. Removes the risk of a seller not having the funds to pay if a warranty claim arises. Can improve the buyer’s negotiating position, as a seller may be willing to consider a lower offer if they know that the sale proceeds will be immediately available to them, rather than waiting for a warranty period to expire or having money held back in an escrow account.

Warranty & Indemnity Insurance | Alan Boswell Group

Name: Warranty & Indemnity Insurance
Brand: Alan Boswell Group
Rating: 4.8 (11210 reviews)

Warranty & Indemnity Insurance

Warranty and indemnity insurance safeguards against financial losses resulting from breaches of warranties or indemnities in corporate transactions.

Provides a clean exit – often avoiding the need for escrow

Makes for a more attractive purchase

Growing market with wider cover and lower premiums

Maintains relationship if the seller stays employed by the business

When selling a business, buyers usually demand that you provide representations and warranties. When you provide the buyer with these warranties and indemnities, you are accepting responsibility for any financial loss that occurs due to misrepresentation. A warranty and indemnity policy (W&I) will help protect your business sale proceeds and provide cover for defence costs arising from the claim of an inaccurate warranty.

The Alan Boswell Group Difference

Alan Boswell Group can provide expertise on all aspects of commercial insurance, from the initial steps taken when setting up a new business through to any potential sale. Not only can we help with your warranty & indemnity insurance, but we can also help with financial advice post-sale.

As an insurance broker we have access to a wide range of products, so we can provide you with the best solution for your business. Add to this service our outstanding in-house claims team and risk management solutions and you have your ideal insurance partner.

Warranty insurance with Alan Boswell Group

How our customers rate us

Always quick - efficient and ensuring you have the right policy for what you are looking for. Fully explores the nature of your request.

Miss Holman - Commercial Combined Insurance

4.8/5 11210 reviews

Warranty & indemnity insurance in detail

A warranty is a written statement provided to the purchaser to back up claims you have made about the business during the sales process. Examples include:

Accounting and other financial information
Employees and pensions
Intellectual property rights

Indemnities offer security for the buyer from known and specific circumstances. Examples include:

Ongoing legal disputes
Existing employee tribunals

Our W&I insurance policy is designed to protect you from any claims made against you for any errors found within these warranties.

Avoid escrow

Frees up sale proceeds by removing the need for escrow.

Peace of mind

Makes your business a more attractive proposition.

Six-year protection

Claims can be made up to six years post-sale.

Growing market

Insurer appetite has led to lower premiums and wider cover.

What is W&I insurance?

Warranty and indemnity insurance is there to protect you from the financial loss associated with claims while providing both parties with additional peace of mind.

You can read all about W&I insurance, what it is, and how it can help you in our guide.

Alternatively you can download a one-pager on W&I insurance here:

Warranty & indemnity insurance leaflet