Transaction Liability Private Enterprise, also known as TLPE, is an insurance product designed to protect both the Seller and the Buyer in a Merger and Acquisition (M&A) transaction from a breach of the Seller’s reps and warranties. Transaction Liability Private Enterprise insurance is the only program available for the under-$10M enterprise value sector.
Worldwide, M&A professionals are using an insurance policy known as Representation and Warranty (R&W) to transfer risk from the deal parties to an insurance company. This policy has become indispensible in more transactions than ever before, but it has not been available to the majority of M&A deals in which the enterprise value is between $250,000 and $10M.
However, the good news is that HCP National is now offering TLPE insurance, a sell-side R&W policy, created exclusively for the underserved, all-important American small businesses.
If you have an upcoming deal of less than $10M, a Transaction Liability Private Enterprise (TLPE) Insurance policy is a must-have.
To receive a free quote on your TLPE Insurance, please contact HCP National today.
TLPE policies are sell-side only. This means that they are set in motion only when the Buyer brings a claim against the Seller when a breach of the Seller representations in the Purchase and Sale Agreement causes a loss.
TLPE policies are sell-side only. This means that they are set in motion only when the Buyer brings a claim against the Seller when a breach of the Seller representations in the Purchase and Sale Agreement causes a loss.
There are no underwriting fees on TLPE policies. They are underwritten by the Seller completing an application, and underwriters use that application to evaluate risk. This process decreases the overall cost of the TLPE program by $35,000 to $50,000 per deal.
Deductible for TLPE policies are significantly less than traditional R&W policies. Deductibles can be as low as $10,000, and up to $100,000 for a $10M limit, whereas R&W usualy have a minimum deductible of $250,000 to $300,000.
Transaction Liability Private Enterprise insurance policies terms may be up to six years. The terms are designed to match the survival period(s) outlined in the purchase agreement.
Retail, hospitality, real estate, light manufacturing, education, franchise, leisure sectors, technology services, product businesses, transport, professional services, and insurance brokers are all examples of eligible purchasers of TLPE policies.
If you are interested in purchasing a TLPE policy, you will need to:
If you have any questions about how Transaction Liability Private Enterprise insurance will work for your specific situation, please do not hesitate to reach out to discuss or to receive a free quote.
HCP National is the nation‘s largest certified minority-woman-owned insurance brokerage, which may assist your supplier diversity efforts.
