Reps & Warranties

Reps & Warranties

Reps & Warranties

Learn what Reps & Warranties protects and why your business needs it. Ready for a quote? We'll help you understand your coverage options quickly and simply.

Learn what Reps & Warranties protects and why your business needs it. Ready for a quote? We'll help you understand your coverage options quickly and simply.

Learn what Reps & Warranties protects and why your business needs it. Ready for a quote? We'll help you understand your coverage options quickly and simply.

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What Is Reps & Warranties?

Reps & Warranties insurance helps manage the financial risk of a deal when statements made in an M&A transaction turn out to be inaccurate. It can protect buyers or sellers from certain losses tied to breaches of representations and warranties in the purchase agreement.

What Does Reps & Warranties Cover?

It can cover certain losses, defense costs, and settlement amounts when a covered representation in the deal documents is breached. Coverage is typically tied to the purchase agreement, the defined reps, and the policy’s terms and exclusions.

Financials were overstated

After closing, the buyer discovers revenue was recognized early and the financial statements were not accurate under the agreement. The buyer seeks recovery for the resulting loss and related legal costs.
After closing, the buyer discovers revenue was recognized early and the financial statements were not accurate under the agreement. The buyer seeks recovery for the resulting loss and related legal costs.

Undisclosed tax exposure surfaces

A state tax authority audits prior periods and assesses back taxes and penalties that were not disclosed during diligence. The buyer alleges a breach of the tax representations and pursues damages.
A state tax authority audits prior periods and assesses back taxes and penalties that were not disclosed during diligence. The buyer alleges a breach of the tax representations and pursues damages.

Compliance issue triggers a customer claim

A key customer alleges the target was not meeting a contractual or regulatory requirement that was represented as compliant. The buyer claims the representation was breached and looks to the policy for covered loss.
A key customer alleges the target was not meeting a contractual or regulatory requirement that was represented as compliant. The buyer claims the representation was breached and looks to the policy for covered loss.

Reps & Warranties Made Simple

Everything you need to know about this coverage, from basic definitions to real-world application scenarios.

Who typically buys Reps & Warranties insurance, the buyer or the seller?

Either can, but buyer-side policies are common because they let the buyer pursue recovery from the insurer instead of relying solely on the seller’s indemnity. Seller-side policies can also be used to cap or limit the seller’s post-close exposure. The right structure depends on leverage, escrow strategy, and how the purchase agreement is written.

What kinds of deals are a fit for Reps & Warranties coverage?

What does Reps & Warranties usually not cover?

How is the policy limit and retention determined?

How long does Reps & Warranties coverage last?

What do insurers look for during underwriting?

Who typically buys Reps & Warranties insurance, the buyer or the seller?

Either can, but buyer-side policies are common because they let the buyer pursue recovery from the insurer instead of relying solely on the seller’s indemnity. Seller-side policies can also be used to cap or limit the seller’s post-close exposure. The right structure depends on leverage, escrow strategy, and how the purchase agreement is written.

What kinds of deals are a fit for Reps & Warranties coverage?

What does Reps & Warranties usually not cover?

How is the policy limit and retention determined?

How long does Reps & Warranties coverage last?

What do insurers look for during underwriting?

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Insurance solutions built exclusively for businesses, boards, and communities.

© 2026 GritStone Agency Inc. All rights reserved.

Protect your business now.

Quote in less than 5 minutes.

Insurance solutions built exclusively for businesses, boards, and communities.

© 2026 GritStone Agency Inc. All rights reserved.

Protect your business now.

Quote in less than 5 minutes.

Insurance solutions built exclusively for businesses, boards, and communities.

© 2026 GritStone Agency Inc. All rights reserved.

Protect your business now.

Quote in less than 5 minutes.

Insurance solutions built exclusively for businesses, boards, and communities.

© 2026 GritStone Agency Inc. All rights reserved.