Ep 30: Keep More Cash at Closing: How Reps & Warranty Insurance Works
What if you could cover the risk of a deal without tying up your money for a year or more? Guest Patrick Stroth, National Practice Leader for Mergers & Acquisitions at Liberty Company Insurance Brokers, explains how Reps & Warranty Insurance (RWI) protects both buyers and sellers without the traditional escrow holdback.
Both sides of a deal are trying to remove as much financial risk as possible, and RWI helps them do it.
- The policy transfers the financial risk, replacing the traditional escrow
- Streamlines negotiations bypassing the debate over indemnity, escrow amount, and escrow length
- Pays claims when something goes wrong
Once reserved for upper middle-market and larger deals, RWI is becoming more common and available for lower mid-market transactions.
Tune in to understand the difference between buy-side and sell-side policies and how RWI is a tool to get the deal to closing.
https://touchstoneadvisors.com/
https://open.spotify.com/show/0ZTB8JWw33563DZ4jUI8vF?si=4e4453fdab744c87
https://www.linkedin.com/company/touchstone-advisors-m-a/
https://directlinemediaproductions.com/professional-podcast-production
https://touchstoneadvisors.com/
https://open.spotify.com/show/0ZTB8JWw33563DZ4jUI8vF?si=4e4453fdab744c87
https://www.linkedin.com/company/touchstone-advisors-m-a/
https://directlinemediaproductions.com/professional-podcast-production
Creators and Guests
Host
Deborah Agrafojo
Deborah has influenced and directed strategic and owner-operator mergers and acquisitions in many different fields. She believes strongly that assisting a business to grow and develop strong practices is the best way to create a company that is poised for exit planning or gaining an equity growth partner.
Producer
David Chmielewski
At the end of 2013 David founded DirectLine Media, a video production company that specializes in creating memorable and compelling video content for businesses. Admired for his unique and creative visual story telling, David continues to work with small to large businesses and nonprofit organizations.
Guest
Patrick Stroth
Patrick is a trusted authority in executive and transactional liability. Patrick’s M&A practice began by harnessing niche insurance tools to empower Sellers of Lower Middle Market companies to secure a clean exit from their M&A transactions faster, and with significantly more cash at closing. This keen focus in the M&A space has earned Patrick the title “Champion of the Clean Exit”. As National Practice Leader for Mergers & Acquisitions for Liberty Company Insurance Brokers, a national platform of highly respected insurance professionals, Patrick and his team deliver the broadest array of transactional liability coverage solutions to the middle and lower middle market. These programs range from RWI – both Buy and Sell side, RWI for Real Estate, Naked D&O Tail, Tax Liability, Environmental Liability, End of Fund Life (EOFL), and Secondary transactions, making Liberty Company Insurance Brokers a one-stop-shop for “all things M&A”. Patrick is a prolific producer of M&A insurance content and is the host of “M&A Masters Podcast” where he speaks with the leading experts in mergers and acquisitions. A native San Franciscan, Patrick now lives in Menlo Park, CA with his wife Barbara, their two daughters, and Rian, their second Pomeranian.