Close With Confidence. Transfer the Risk.
Protecting both sides of a merger or acquisition
Transaction risk insurance protects the parties to a merger or acquisition from financial loss when a risk tied to the deal surfaces after the transaction closes. Its flagship product — Representations and Warranties (R&W) insurance — covers losses a buyer suffers when the seller's promises in the purchase agreement turn out to be inaccurate, and it lets a seller walk away with a cleaner exit and less of the sale price tied up in escrow. Alongside it sit tax liability and contingent liability policies that isolate specific, identified exposures so a deal does not stall over them.
In competitive M&A, this coverage has moved from a nice-to-have to a standard tool for getting deals done on terms both sides can live with.
What Transaction Risk Insurance Covers
Transaction risk solutions typically include:
Representations & Warranties (Buy-Side) — Reimburses a buyer for losses from a breach of the seller's reps and warranties discovered after closing — often as the buyer's primary recourse in place of a large seller indemnity.
Representations & Warranties (Sell-Side) — Protects a seller against covered claims for innocent misrepresentations, allowing a lower escrow or holdback and a faster distribution of proceeds.
Tax Liability Insurance — Covers a specific, identified tax position that could be challenged by a taxing authority, removing an uncertain liability from the negotiation.
Contingent Liability Insurance — Ring-fences a known risk — such as pending litigation or a successor-liability question — so it does not derail or re-price the deal.
Defense & Loss Costs — Defense expense, and the financial loss or diminution in value resulting from a covered breach, subject to the policy retention and limit.
What It Does Not Cover
Transaction risk policies commonly exclude:
Matters actually known to the deal team or disclosed in diligence
Purchase-price adjustments and net-working-capital true-ups
Forward-looking projections and financial forecasts
Covenants and post-closing obligations (as opposed to reps and warranties)
Certain specialized exposures (pension underfunding, some environmental and transfer-pricing matters), unless specifically underwritten
Coverage is shaped by the diligence performed and the final policy language.
Who Needs Transaction Risk Insurance?
This coverage is used by:
Private equity funds and their portfolio companies, on both buy and sell sides
Strategic and corporate acquirers
Founders and shareholders selling a business
Search funds, family offices, and independent sponsors
Lenders and investors seeking certainty around a deal's risk allocation
If you are buying or selling a business, transaction risk cover can change how the deal is negotiated.
How Coverage Is Structured
These policies are written deal-by-deal and typically feature:
A policy period matched to the survival periods in the purchase agreement — often around three years for general reps and up to six for fundamental and tax matters
A retention (deductible) that may step down after an initial period
Limits set as a percentage of enterprise value
Buy-side or sell-side forms, with buy-side the most common
Underwriting built on the parties' due-diligence reports and the data room
Placement runs on the deal's timeline, so early engagement matters.
Real-World Claim Examples
Post-closing, a buyer discovers the target overstated recurring revenue
An undisclosed customer dispute matures into litigation after the sale
A tax position the seller treated as settled is challenged by authorities
Financial statements relied on in diligence contained a material error
Intellectual property the seller represented as owned is subject to a third-party claim
In each case, the policy can respond where the seller's indemnity is capped, escrowed, or gone.
Why Proper Placement Matters
Transaction risk coverage varies widely based on:
How tightly the policy tracks the reps in the purchase agreement
The quality and scope of the diligence underwriters review
Retention structure and any step-downs
Carve-outs negotiated for the specific deal
Timing against signing and closing
A policy that does not mirror the agreement can leave the exact risk the parties bargained over uninsured.
Our Approach
At Cory Washington & Co., we treat transaction risk as a deal tool, not a form. We align the policy with the purchase agreement and the diligence, coordinate with deal counsel and the underwriting process, and help buyers and sellers understand exactly where the coverage picks up and where it stops — so the insurance supports the transaction instead of complicating it.
The right coverage lets both sides shake hands and move on.
All insurance descriptions on this website are provided by Cory Washington & Co. LLC strictly for general informational purposes. They are not intended to be, and should not be relied upon as, legal, financial, or insurance advice. The information presented is general in nature and does not guarantee the availability, terms, conditions, or scope of any insurance coverage. Actual coverage is determined solely by the specific policy language issued by the insurer and remains subject to underwriting approval. Nothing on this website creates or implies an agent-client relationship, binds coverage, or alters any existing policy. Cory Washington & Co. LLC expressly disclaims any liability for actions taken, or not taken, based on the content provided here. For advice regarding your particular situation, please consult directly with a licensed insurance professional at Cory Washington & Co. LLC or another qualified insurance professional, and always review your policy documents in full.
See what to confirm in a transaction risk policy — what's standard, what's often limited, and what to add if needed — plus the gap most often missed, in the Transaction Risk Policy Feature Checklist.
Complete the Transaction Risk Supplemental online in a few guided steps, download the fillable PDF, or browse all applications.
Frequently Asked Questions
How do I get transaction risk insurance through Cory Washington & Co.?
Request a quote or contact our team. We start with a short conversation about your operations, analyze your exposures, then negotiate transaction risk insurance across multiple carriers that compete for your account and present options with the trade-offs explained. Cory Washington & Co. LLC is licensed in all 50 states.
What does transaction risk insurance cost?
There is no flat rate. The cost of transaction risk insurance reflects your industry, your size (payroll and revenue), your claims history, and the limits and deductibles you choose. We market your account to multiple carriers, compare the real quotes side by side, and explain what is driving each number so you can weigh coverage against price with confidence.
Is transaction risk insurance required?
Whether transaction risk insurance is strictly required depends on your state, your contracts, and your lenders or clients. Even where it is not mandatory, going without it can leave serious financial gaps. We assess your exposure and any contractual requirements, then structure coverage that meets both.
What if another agency has already declined or non-renewed my coverage?
Difficult, specialty, and previously-declined placements are a core part of our work. We access excess & surplus (E&S) and specialty markets that many generalist agencies cannot, and we explain the trade-offs clearly so you can decide with confidence.
Available in all 50 states. See how requirements differ in California, Texas, Florida, New York, or choose your state.