How the Reps and Warranties Insurance Trap Hurts Sellers

The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators · Jun 20, 2026 · 11m · transcript

In this episode, Lucas and Luna dissect a growing middle-market M&A pitfall: reps and warranties insurance that ends up costing sellers more than they saved. They walk through the real case of a $45 million SaaS exit where the buyer's RWI policy triggered a $3.2 million coverage gap, leaving the seller on the hook for a data-privacy indemnity that the policy specifically excluded. Lucas explains how the 'tipping point' in RWI — the retention amount and the coverage carve-outs — can shift risk back to sellers in ways that aren't obvious in the term sheet. Luna pushes back…