Recent risks: Transaction liability insurance for small deals

Limit: £8,500,000
Enterprise value: £8,500,000

A regional brokerage approached CFC because one of their longstanding clients – a manufacturer and supplier of pipes for the UK water industry – was selling their business. There was concern regarding the liabilities they faced due to the extensive warranties they were providing to the buyer. The broker had never placed W&I insurance previously, but CFC was able to quickly provide competitive terms for the full enterprise value with little broker interaction

Limit: £666,667
Enterprise value: £666,667

A local electricity meter installation business had already been sold, but the broker was told by other markets that insurance was not available due to the smaller deal size. CFC was able to provide an effective and competitive solution despite the transaction having already closed.

Limit: £6,250,000
Enterprise value: £6,250,000

A specialist M&A broker had a smaller deal for which they were struggling to find competitive terms. The seller was an online and instore retailer of bicycles and accessories. CFC quickly provided competitive terms and gave comprehensive responses to all questions and queries from the buy-side lawyers. The policy was put in place efficiently and the deal concluded smoothly.

Limit: £2,400,000
Enterprise value: £1,200,000

A file storage and document collaboration business was being sold, and the sellers had concerns regarding the large proportion of sale proceeds which was due to be tied up in escrow. The broker came to CFC looking for insurance as an alternative to escrow. CFC was able to provide highly competitive terms and make the buyer a loss-payee under the policy. This allowed the seller to negotiate the removal of the escrow. In a high-inflationary environment, freeing up a larger proportion of sale proceeds can save the sellers huge sums of money.