---
title: "What Is Representations and Warranties Insurance?"
description: "Representations and warranties insurance addresses financial loss from inaccurate statements in a business purchase agreement."
canonical: "https://spot.insure/coverage/representations-warranties"
page-type: "coverage-article"
updated-at: "2026-09-16"
verified-at: "2026-09-16"
---

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[Human-readable page](https://spot.insure/coverage/representations-warranties)

# What Is Representations and Warranties Insurance?

Representations and warranties insurance addresses financial loss from inaccurate statements in a business purchase agreement.

## Summary

Representations and warranties insurance addresses financial loss from inaccuracies in the representations or warranties made in a stock or asset purchase agreement. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/)

## What Does Representations and Warranties Insurance Cover?

Representations and warranties insurance addresses financial loss from inaccuracies in the representations or warranties made in a stock or asset purchase agreement. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/)

### Statements in the Sale Agreement

Representations and warranties are statements of fact about the business being sold; an indemnity is a separate promise to be responsible for another party’s loss if a described event occurs. [1](https://www.cfc.com/en-us/products/class/transaction-liability/)

### Who Is Insured and Who Can Recover

Confirm whether the buyer or seller is insured, and ask who can recover under the policy and how that recovery interacts with claims against the seller. [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [3](https://www.coverdash.com/coverage/transactional-risk)

| Question | Why it matters in a stock purchase |
| --- | --- |
| Is the buyer or the seller insured? | The two structures answer different loss paths. |
| Who can recover under the policy? | Recovery is not automatic from the product label. |
| How does recovery interact with claims against the seller? | Remaining seller indemnity still belongs in the same conversation. |

## Who Needs Representations and Warranties Insurance?

Consider R&W for a stock or asset purchase, alongside the purchase agreement, disclosures and due-diligence findings. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [3](https://www.coverdash.com/coverage/transactional-risk) [1](https://www.cfc.com/en-us/products/class/transaction-liability/)

## Coverage Examples

These are examples, not coverage guarantees. Your policy terms and the facts of the claim determine what is covered.

### An Inaccuracy Comes to Light After Closing

After buying a business, you discover that a statement in the purchase agreement was inaccurate.

R&W may cover financial loss from an insured inaccuracy. The representations, disclosures and policy terms determine the scope and how recovery works alongside seller indemnity. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [3](https://www.coverdash.com/coverage/transactional-risk)

### Diligence Finds a Problem Before Signing

Your team identifies a potential problem before signing the purchase agreement.

Known issues can be treated differently from inaccuracies discovered later. Disclose the problem so the insurer can explain whether it is excluded or otherwise addressed. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [3](https://www.coverdash.com/coverage/transactional-risk) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions)

## How Do You Compare Coverage and Costs?

### The Purchase Agreement and the Policy

Compare the representations in the purchase agreement and disclosure schedules with the statements the policy is intended to insure. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/)

### Limit, Retention and Duration

Compare the proposed limit and retention with the size of the deal and the remaining seller indemnity, and ask how long the policy runs after closing. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/)

A deal may retain seller indemnity, escrow or other security even when insurance is purchased. Compare those protections with the policy's limit and retention. The insurance and purchase agreement need to work together; buying a policy doesn't itself remove the seller's remaining contractual obligations. [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/)

## What Known Issues Should You Discuss?

Ask how the quote treats issues already known from due diligence or disclosure, as opposed to inaccuracies that were not known when the deal was signed. [3](https://www.coverdash.com/coverage/transactional-risk) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions)

| Example issue | Question to ask |
| --- | --- |
| An accounting error that was not known at signing | Is this the kind of inaccuracy the quote is meant to address? |
| A tax exposure already flagged in diligence | How does the quote treat a known issue? |
| A dispute about the purchase price | Is this a representations and warranties question at all? |

## How Does It Compare With Related Coverage?

### Other Deal Products

Tax, contingent-liability and other transaction products are separate from representations and warranties insurance; list each product in the quote rather than treating the package name as complete. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [3](https://www.coverdash.com/coverage/transactional-risk)

### Ongoing Management Liability

Representations and warranties insurance is arranged around a specific transaction; it is a different discussion from the company’s ongoing directors and officers or management liability coverage. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [4](https://content.naic.org/glossary-insurance-terms)

## What Do You Need for a Quote?

Prepare the draft purchase agreement and disclosure schedules, due-diligence reports, a description of the buyer, seller and transaction, and any issues already identified that should be discussed with the insurer. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [3](https://www.coverdash.com/coverage/transactional-risk) [1](https://www.cfc.com/en-us/products/class/transaction-liability/)

### Deal Documents and Diligence

| Prepare | How to use it |
| --- | --- |
| Draft purchase agreement and disclosure schedules | Match insured statements to the actual representations |
| Due-diligence reports | Separate known issues from unknown inaccuracies |
| Description of the buyer, seller and transaction | Confirm who is insured and who can recover |
| Remaining seller indemnity, escrow or other security | Compare limit, retention and remaining contractual protection |
| Issues already identified | Ask how the quote treats them |

[2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [3](https://www.coverdash.com/coverage/transactional-risk) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [3](https://www.coverdash.com/coverage/transactional-risk) [3](https://www.coverdash.com/coverage/transactional-risk) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions)

## Key Terms in Plain English

### Representation or Warranty

A statement of fact about the business being sold, made in the transaction agreement. [1](https://www.cfc.com/en-us/products/class/transaction-liability/)

### Seller Indemnity

A separate promise by the seller to be responsible for a described loss; compare it with the policy and remaining escrow. [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [1](https://www.cfc.com/en-us/products/class/transaction-liability/)

## Frequently Asked Questions

### Does R&W Replace Ongoing D&O Coverage?

No. R&W is arranged for a particular transaction. Ongoing D&O and management liability address the company's continuing operations and leadership. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [4](https://content.naic.org/glossary-insurance-terms)

### Can R&W Cover Issues Found During Diligence?

Known issues need to be disclosed and checked against the quote. They can be treated differently from inaccuracies that were unknown at signing. [3](https://www.coverdash.com/coverage/transactional-risk) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions)

### Does Representations and Warranties Insurance Protect the Buyer or the Seller?

The arrangement can be structured for either party. Confirm which party is insured, who can recover under the policy, and how an insurance recovery interacts with any claim against the seller. [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [3](https://www.coverdash.com/coverage/transactional-risk)

### Are Tax and Contingent Liability Insurance Included in R&W?

They are separate transaction products. Check which products the quote actually includes; a transaction-liability package name does not establish that tax or contingent-liability protection is included. [2](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions) [1](https://www.cfc.com/en-us/products/class/transaction-liability/) [3](https://www.coverdash.com/coverage/transactional-risk)

## Related Coverage

- [What Is Directors and Officers Insurance?](https://spot.insure/coverage/directors-officers) — Directors and officers liability insurance addresses covered claims alleging wrongful acts in managing an organization.
- [What Is Management Liability Insurance?](https://spot.insure/coverage/management-liability) — Management liability brings together coverage options for risks associated with running an organization, such as directors and officers liability and employment practices liability.

## Documented Providers

### [Beazley](https://spot.insure/insurance-providers/beazley)

Beazley offers representations and warranties insurance. [5](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions)

### [CFC](https://spot.insure/insurance-providers/cfc)

CFC offers buyer-side and seller-side representations and warranties insurance. [6](https://www.cfc.com/en-us/products/class/transaction-liability/)

### [Chubb](https://spot.insure/insurance-providers/chubb)

Chubb offers representations and warranties insurance within its offering for large US- and Canadian-based multinational companies. [7](https://www.chubb.com/us-en/business-insurance/multinational-for-large-companies.html)

### [Corgi](https://spot.insure/insurance-providers/corgi)

Corgi lists representations and warranties insurance for M&A buyers and sellers. [8](https://www.corgi.insure)

### [Coverdash](https://spot.insure/insurance-providers/coverdash)

Coverdash arranges representations and warranties insurance for mergers and acquisitions. [9](https://www.coverdash.com/coverage/transactional-risk)

### [Founder Shield](https://spot.insure/insurance-providers/foundershield)

Founder Shield lists representations and warranties insurance for mergers and acquisitions. [10](https://foundershield.com/coverage/)

### [Gallagher](https://spot.insure/insurance-providers/gallagher)

Gallagher arranges representations and warranties insurance. [11](https://www.ajg.com/insurance/executive-and-financial-risk-insurance/)

### [Heffernan Insurance Brokers](https://spot.insure/insurance-providers/heffernan)

Heffernan arranges representations and warranties insurance. [12](https://www.heffins.com/business-insurance/private-equity-and-ma/)

### [HUB International](https://spot.insure/insurance-providers/hub-international)

HUB International arranges representations and warranties insurance. [13](https://www.hubinternational.com/products/business-insurance/mergers-and-acquisitions-insurance/)

### [Lockton](https://spot.insure/insurance-providers/lockton)

Lockton arranges representations and warranties insurance. [14](https://global.lockton.com/us/en/products-services/solutions-for-private-equity-firms)

### [Newfront](https://spot.insure/insurance-providers/newfront)

Newfront arranges representations and warranties insurance as part of its mergers-and-acquisitions transaction-liability services. [15](https://www.newfront.com/services/mergers-acquisitions)

### [USI Insurance Services](https://spot.insure/insurance-providers/usi)

USI arranges representations and warranties insurance. [16](https://www.usi.com/property-casualty/private-equity)

## Sources

1. [Transaction liability insurance | Representation and indemnities insurance](https://www.cfc.com/en-us/products/class/transaction-liability/). CFC; What are representations and warranties?; Who should buy representation and warranty insurance?; Available to buyers & sellers; Limited seller security; Is transaction liability insurance available to sellers. Accessed 2026-09-16.
2. [Mergers & Acquisitions](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions). Beazley; Product overview: buyer and seller protection for inaccuracies in representations or warranties. Accessed 2026-09-16.
3. [Transactional Risk Insurance](https://www.coverdash.com/coverage/transactional-risk). Coverdash; Transactional risk insurance; representations and warranties coverage; buy-side policies; tax and contingent liability products. Accessed 2026-09-16.
4. [Glossary of Insurance Terms](https://content.naic.org/glossary-insurance-terms). National Association of Insurance Commissioners; Directors & Officers Liability. Accessed 2026-09-16.
5. [Mergers & Acquisitions](https://www.beazley.com/en-us/products/executive-risk-usa/mergers-acquisitions). Beazley; What we offer: representations/warranties, target customers and 50-state statement. Accessed 2026-09-16.
6. [Transaction liability](https://www.cfc.com/en-us/products/class/transaction-liability/). CFC; Transaction liability; Buyer protect; Seller protect; Secondary liquidity solutions; Limit & appetite. Accessed 2026-09-16.
7. [Multinational Insurance Coverage And Solutions For Large Accounts](https://www.chubb.com/us-en/business-insurance/multinational-for-large-companies.html). Chubb; Core and specialty coverages, including Specialty Coverage: Representations & Warranties, inland marine, professional liability and ESIS; large US and Canadian multinational companies; Worldview servicing platform; work with clients and brokers. Accessed 2026-09-16.
8. [Corgi Insurance homepage](https://www.corgi.insure). Corgi Insurance Services, Inc.; Product packages: Cyber and Directors & Officers; Growth Stage and Custom Package; Self-Serve (apply, get quoted in minutes, bind same-day) and Book a Demo paths; Explore Our Main Policies: Commercial General Liability, Crime Insurance, Fiduciary Liability, Hired and Non-Owned Auto (HNOA), Worker’s Compensation; Specialized coverages: Employment Practices Liability (EPLI), K&R (Kidnap & Ransom), Representations and Warranties; Commercial Umbrella Liability; Business Owners Policy (BOP); Coverage sales cards: Media Liability, Medical Malpractice, Miscellaneous E&O; Core Operations: Tech E&O Insurance; Tech & AI Liability product module; Transportation menu: Auto Liability, Contractual Liability Insurance - Cargo; FAQ on cost, claims, and binding; footer entity, program-administrator and issuing-carrier notices. Accessed 2026-09-16.
9. [Transactional Risk Insurance](https://www.coverdash.com/coverage/transactional-risk). Coverdash; Introduction; Reps and warranties, tax liability and contingent liability offering cards; Transactional risk offering and representations and warranties quote route. Accessed 2026-09-16.
10. [Coverage](https://foundershield.com/coverage/). Founder Shield; Core Coverage: Crime Insurance, Cyber Liability, Directors & Officers, Employment Practices Liability, Fiduciary Liability, General Liability, Property Insurance; Specialized Coverage: Digital Asset Insurance, ERISA Fidelity Bond, Hired & Non-Owned Auto, Intellectual Property, Key Person & Contract Frustration, Last-Mile Delivery Insurance, Transit & Transportation; product cards: Errors & Omissions, Product Liability, Representations and Warranties, Umbrella Insurance, VCAP, Virtual Care & Telehealth Insurance, Workers Compensation; Health & Benefits: Employee Health & Benefits; Get a Quote and Learn More links. Accessed 2026-09-16.
11. [Executive and Financial Risk Insurance](https://www.ajg.com/insurance/executive-and-financial-risk-insurance/). Gallagher; Opening (insurance broking and placement); three key services; Directors and Officers; IPO and direct listings; Employment Practices; Fiduciary; Employee Dishonesty (Crime) and Fidelity Bond; Kidnap, Ransom and Extortion; M&A Transactional Insurance. Accessed 2026-09-16.
12. [Private Equity and M&A](https://www.heffins.com/business-insurance/private-equity-and-ma/). Heffernan Insurance Brokers; HIB Private Equity and M&A Practice (private-equity firms and strategic investors); Representation & Warranty (RWI) Insurance; Transactional Risk Mitigation list including contingent, environmental, tax and litigation buyout. Accessed 2026-09-16.
13. [Mergers & Acquisitions (M&A) Insurance Broker](https://www.hubinternational.com/products/business-insurance/mergers-and-acquisitions-insurance/). HUB International; Representations and warranties, litigation buyout and tax indemnification insurance. Accessed 2026-09-16.
14. [Risk & People Solutions for Private Equity Firms](https://global.lockton.com/us/en/products-services/solutions-for-private-equity-firms). Lockton; Lockton capabilities across the investment life cycle: D&O/GPL, transaction insurance (reps, tax, litigation), E&O, crime and FI bonds, cyber, EPL, surety, portfolio company programs, key person insurance and benefits design. Accessed 2026-09-16.
15. [Mergers & Acquisitions](https://www.newfront.com/services/mergers-acquisitions). Newfront; Transaction liability: R&W, tax and contingent liability insurance; Due diligence; Go-forward insurance & benefits. Accessed 2026-09-16.
16. [Private Equity](https://www.usi.com/property-casualty/private-equity). USI Insurance Services; Representations and warranties insurance, employee benefits due diligence, and post-close P&C and benefits servicing. Accessed 2026-09-16.

Updated 2026-09-16. Factually reviewed 2026-09-16. Spot, a product of Tools for Enlightenment, publishes this research and works in the commercial insurance market. [Editorial policy](https://spot.insure/editorial-policy). To suggest a correction, [contact Spot](https://spot.insure/contact) with the page URL and supporting source.

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