What Are the Key Differences Between CFC and Lockton Representations and Warranties Insurance?
Small-Deal Products and Published Capacity vs Lawyer-Staffed Placement
CFC underwrites transaction liability itself: Buyer Protect and Seller Protect for deals under $20 million, quoted within 24 hours, and a core policy with up to $50 million per transaction plus $150 million of excess for certain fundamental representations. Lockton’s RWI practice places policies with insurers it doesn’t name, staffing each deal with a partner and an associate from former M&A lawyers and transaction advisors, available 24/7. Choose CFC if you are closing a deal under $20 million and need cover fast; choose Lockton if you want lawyers negotiating terms across several insurers on a larger deal. [3] [5]
Tax and Secondaries Cover vs Escrow Replacement
CFC’s core policy covers representations and warranties, contingent tax and other M&A liabilities, and it runs a secondaries practice. Lockton frames RWI as replacing or topping up a seller indemnity or escrow, with the insurer paying the buyer for losses from an unknown breach. [3] [5]
In-House Claims Team vs Broker Claims Advocates
CFC has its own transaction-liability claims team in London and New York that aims to acknowledge a notice within 24 hours. Lockton says its claims experts stay with you after binding and that it has helped clients settle hundreds of millions of dollars of RWI claims. [3] [5]
What Should You Confirm in CFC and Lockton Representations and Warranties Insurance Quotes?
- Ask Lockton which insurer would write your policy; CFC writes on Lloyd’s and other A-rated insurers, so ask which one. [5] [3]
- Ask CFC whether you are quoted a Protect product, the core policy, excess or secondaries. [3]
- Ask Lockton whether its quote replaces escrow or sits above a reduced indemnity. [5]
- Get total limits on both; CFC publishes $50 million per deal and $150 million excess on certain fundamentals. [3] [5]