Warranty and Indemnity
Of vital use to clients buying or selling businesses, this cover provides indemnity resulting from a breach of warranty given in the sale and purchase agreement.
This insurance is not as widely purchased as it should be given the volume of company sales and purchases, which is surprising as it potentially protects:
- All warranties and indemnities in the Sale and Purchase agreement
- Defence Costs and Settlements
- The policy is designed for the duration of the warranties and indemnities
They are particularly useful where there may be an impasse between the buyer and seller.
One of the main attractions of this type of insurance is that if correctly drawn the policy can allow the Vendor to safely use the proceeds of the sale of the business without having to worry that he may have to personally deal with any major financial loss suffered by the purchaser as a result of an alleged breach of a warranty or indemnity given at the time of sale.
