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1-888-478-6756 Monday to Friday, 8:30am - 5pm
contactus@hcpnational.com Drop us a line anytime!
16-A Journey, Suite 150 Aliso Viejo, CA 92656
Get a Quote
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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.

About Transaction Liability Private Enterprise (TLPE) Insurance

For the Seller, TLPE:

  • Provides coverage for defense costs that arising from the claim of an inaccuracy in a warranty or representation.
  • Provides up to 100% of the enterprise value to pay indemnity to the buyer if there is a breach.
  • Locks in the return of the sale proceeds and arranges a clean exit since the indemnity exposure is covered.
  • Accelerates the sale by removing the indemnification from the discussion.

For the Buyer, TLPE:

  • Eases concerns about collecting on a Seller’s indemnification.
  • Extends the benefits of R&W protection without the cost.
  • Protects the relationship with the Seller; in the event that the Selle remains with the company and a breach occurs, the Buyer pursues the Seller’s insurer, rather than the Seller personally.
  • Accelerates the sale by removing the indemnification from the discussion.

TLPE Policy Quick Facts

Sell-Side Only

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.

Enterprise Value

TLPE policies can cover organizations with transactional values of as little as $250,000 and up to $10M. Deals can be insured for up to 100% of the enterprise value.

Underwriting Fees

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.

Lower Deductibles

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.

Policy Period

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.

Eligible Risks

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.

Underwriting & Placement Process for TLPE Policies

If you are interested in purchasing a TLPE policy, you will need to:

  1. Contact HCP National to start the process.
  2. Complete, sign, and date a TLPE policy application
  3. Provide your organization’s latest annual and year-to-date financial statements
  4. Accept the terms of your proposal (issued within three business days) and send premium payment to receive your bound policy.

Contact HCP National

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 nations largest certified minority-woman-owned insurance brokerage, which may assist your supplier diversity efforts.

The above is a general discussion of insurance. It is by no means a promise of coverage or anything definitive. Always read your policy and review it with your counsel to determine how your coverage works.

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