.png)
Transaction Liability Insurance is a tool used to safeguard buyers and sellers involved in mergers, acquisitions or any other business transaction. It is the ‘Warranties and Indemnities insurance policy’ for the SME market.
In a transaction, the seller will typically be required to provide warranties to the buyer. The warranties are a guarantee that promises and information provided is complete and accurate, and if not, a remedy is available.
If there has been an innocent breach of a warranty, ie: incorrect information provided for example, and the buyer seeks restitution for losses they have suffered, this insurance policy will cover the defence costs and any compensation. The buyer is paid directly.
Transaction Liability Insurance is designed to mitigate risks associated with these transactions by offering financial protection in the event of unforeseen liabilities. These can include breaches of representations and warranties, tax liabilities, and litigation.
Breach of Representations and Warranties: Covers losses arising from inaccuracies or breaches of the seller's representations and warranties in the purchase agreement.
Defence Costs: Covers legal costs associated with defending against claims of breach of representations and warranties.
Damages: Compensates the insured for financial losses resulting from a breach.
Known and Unknown Tax Liabilities: Covers specific tax risks identified during due diligence or unknown tax risks that may arise post-transaction.
Defence Costs: Covers costs associated with defending against tax authority claims.
Specific Contingent Risks: Covers specific known risks identified during due diligence, such as pending litigation or environmental liabilities.
Defects in Title: Covers losses arising from defects in the title to property or other assets being transferred in the transaction.
Gap in Indemnification: Covers losses during the period between signing and closing of the transaction.
Transaction Liability Insurance is recommended for any buyers and sellers in private merger and acquisition transactions. In most cases, it is purchased by the buyer.
We have you covered.
TLI covers the risk of claims arising from breaches of warranties or representations made during a transaction.
Buyers, sellers, and investors involved in transactions such as mergers or acquisitions can benefit from Warranties insurance.
It covers financial losses from breaches of warranties, including legal fees and settlement costs.
It protects buyers from financial losses due to inaccuracies or omissions in the seller’s warranties.
It shields sellers from post-transaction claims, reducing their financial risk and potential disputes.
While not mandatory, it is useful for transactions involving significant financial exposure or complex agreements.
Warranties insurance specifically covers high net value transactions, while Transactional Liability insurance may coverage for SME businesses starting from $250,000 upto $30M of enterprise value.
No, it’s a one off premium payable and the policy coverage is available for 7 years.
We believe in working closely with you to understand your unique needs and preferences, ensuring that the insurance coverage we offer is affordable and precisely tailored to meet your requirements.
.png)
Professional Lines Insurance Brokers Pty Ltd T/As PLI Brokers (CAR 1308221| ABN 54 601 665 141) Corporate Authorised representative of Community Broker Network Pty Ltd | AFSL 233750 | ACN 096 916 184
.svg)
.png)
.png)