Reps & warranty insurance insures the buyer from a breach of reps & warranties in the purchase agreement. A purchase agreement's representations can include data security, outstanding taxes, and accounting policies, which insurance would not otherwise cover. If there’s a breach, the buyer (or seller) would tap the insurance policy instead of an escrow or other mechanism. Without reps & warranty insurance, a portion of the seller's closing proceeds would generally be held in an escrow to protect against potential breaches. The escrow is typically 10% of the purchase price and stays in place for 12 to 24 months. Reps & warranty insurance can … [Read more...]