Pricing read from Gallagher, Aon, Euclid, SRS Acquiom and M&A counsel, September 2026
Rep and Warranty Insurance Cost, R&W Insurance Premium and Retention by Deal Size
Rep and warranty insurance costs about 3% of the coverage limit, and most buyers insure 10% of the purchase price. Gallagher put the average quoted primary rate at 3.23% in the fourth quarter of 2025, up from 2.5% a year earlier. On top of the premium you pay a $25,000 to $50,000 underwriting fee and surplus lines tax, and insurers set a minimum premium of about $100,000 to $150,000. The retention, the loss you absorb before the policy pays, averaged 0.5% of enterprise value in 2025.
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That minimum premium is what decides who can use it. On a $100 million deal the whole policy costs well under half a percent of the price. On a $5 million SaaS acquisition the same minimum works out to roughly 2.6% to 4.1% of the price, which is why most brokers say traditional cover starts somewhere between $20 million and $50 million. Below that, buyers use an indemnity escrow (a median of 10% of deal value in 2025 without insurance, per SRS Acquiom), a holdback, a seller note they can offset, or one of the small-deal policies priced at 1% to 2% of the insured amount.
Buyouts is a marketplace for AI SaaS businesses, not an insurer. What we do is the thing claims data says matters most: financial statement breaches are the largest source of paid R&W losses, and we verify MRR, ARR, growth and churn against the billing data before a listing goes live. Buyer membership is $99, $299 or $899 a month, with no success fee on the deal.
The listings, metrics and deals shown across this site are illustrative product UI. Nothing on this page is insurance, legal or tax advice; get a quote from a licensed transactional risk broker and have deal counsel read the policy.
Insurance pays after a breach, and on a small deal it costs more than the risk it covers. The cheaper protection is knowing the numbers are true before you sign: verified revenue, verified churn, and an escrow sized to what is left.
Read from insurers, brokers and deal studies, 30 September 2026
Every way a buyer can protect against a seller breach, and what each one costs
Traditional buy-side RWI is one option of several, and on deals under $10 million it is rarely the cheapest. Prices are the ones the sources publish; where a product has no public price we say so.
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| Protection | Who pays | What it costs | Deal size it fits | Source |
|---|---|---|---|---|
| Buyouts | Buyer membership | $99 to $899 a month, no success fee; not insurance | AI SaaS listings | Verified MRR, ARR, growth and churn before listing |
| Traditional buy-side RWI | Usually buyer, often split | 3.23% of the limit, $100K to $150K minimum, $25K to $50K fee | About $20M to $30M and up | Gallagher 2026 outlook, SRS Acquiom, Koley Jessen |
| Small-deal policy (TLPE) | Seller | 1% to 2% of the insured amount | $500K to $30M enterprise value | Liberty Company TLPE page |
| Buyer Protect | Buyer | Not published | Up to $5M, nil deductible, 18 months | CFC brochure via Liberty Company |
| Seller Protect | Seller | Not published | Up to $5M, Flippa users only | CFC brochure via Liberty Company |
| Synthetic cover (MIO Fusion) | Buyer | $60K to $80K for under $1M of cover | Small deals, unaudited accounts considered | Woodruff Sawyer, 2025 |
| Indemnity escrow | Seller, out of the price | Median 10% of deal value held, no premium | Any size | SRS Acquiom 2026 Deal Terms Study |
Sources disagree on the floor for traditional cover: SRS Acquiom says deals typically start around $30M, Koley Jessen says at least $20M to $30M, Woodruff Sawyer calls it impractical under $50M, and Ice Miller and Gallagher report cover written from $10M. The minimum premium is the reason they differ less than it looks.
Our own math on published rates, labeled as such
What traditional rep and warranty insurance costs at each deal size
Our arithmetic, not a quote. Limit at 10% of price, premium at Gallagher’s 3.23% average rate or the $100,000 to $150,000 minimum if higher, a $25,000 to $50,000 underwriting fee and 4.85% Texas surplus lines tax on the premium. Broker commission is usually inside the premium.
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| Deal size | Policy, all in | Share of the price |
|---|---|---|
| $1,000,000 | Not written as traditional cover | Small-deal policy or escrow instead |
| $5,000,000 | $130,000 to $207,000 (minimum premium applies) | 2.6% to 4.1% |
| $10,000,000 | $130,000 to $207,000 (minimum premium applies) | 1.3% to 2.1% |
| $30,000,000 | $130,000 to $207,000 (minimum premium applies) | 0.4% to 0.7% |
| $100,000,000 | $364,000 to $389,000 | About 0.4% |
| Escrow instead, $5,000,000 deal | $500,000 held at the 10% median, no premium | Paid back to the seller if no claim |
The pattern is a fixed cost dressed up as a percentage. Above about $30 million the 3% rate does the work and the policy is cheap relative to the deal. Below it the minimum premium and the underwriting fee do the work, and a buyer of a $5 million SaaS business pays several times the rate-based price. That is when a 10% escrow for 12 to 18 months, which costs the seller only the time value of the money, beats insurance.
Side by side
Buying through Buyouts against buying RWI on a small deal, honestly
A fair look at what each does well. Both are useful. Here is where they differ.
| Feature | Buyouts | Traditional RWI on a deal under $10M |
|---|---|---|
| What it protects against | Misstated MRR, ARR, growth and churn, checked before you ever make an offer | A breach of any insured rep, discovered after closing |
| Cost on a $5M deal | $99 to $899 a month of membership, no success fee | About $130,000 to $207,000 by our math |
| When you pay | Monthly while you search | At signing or closing, once |
| Retention before it pays | None, it is not a claim product | About 0.5% of enterprise value, halving after 12 months |
| Known issues | Surfaced in the listing and the data room | Excluded from cover |
| Pays you money after a breach | No. We are not an insurer and do not indemnify | Yes, up to the limit, usually 10% of price |
| Covers tax, IP and compliance reps | No, that stays with your diligence and the APA | Yes, subject to exclusions |
Comparison reflects general, publicly understood positioning. Capabilities change, so check each marketplace for the latest. Trademarks belong to their owners.
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How a rep and warranty insurance premium is built
Five numbers make up the bill. The limit is how much the policy can pay; Gallagher reports most buyers insure 10% of deal value and that deals under $100 million average 10% to 15%, higher on smaller deals because claim costs mount quickly. The rate on line is the premium as a share of that limit: 3.23% on average in the fourth quarter of 2025, with technology deals in the low 3% range. The retention is the deductible. Gallagher puts the 2025 average at 0.5% of enterprise value, dropping to 0.4% after twelve months; Lockton's 2024 update shows 0.50% to 0.75% at first and 0.30% to 0.45% after the drop-down. The underwriting fee, $25,000 to $50,000 according to SRS Acquiom, is paid whether or not you bind. And surplus lines tax is added on top: 4.85% in Texas, which the Texas Comptroller publishes, and 4% in New York per Ice Miller. The broker's cut, typically fifteen percent of the premium per Ice Miller, is usually taken from the premium rather than added to it. General reps are covered for three years and fundamental and tax reps for six.
Prices are rising again in 2026
Rep and warranty insurance got cheap in 2023 and 2024 and has been climbing since. Marsh reported North American primary rates up 16% in 2025 after a 14% fall in 2024. Gallagher's average quoted rate went from 2.5% in the fourth quarter of 2024 to 3.23% a year later. Euclid Transactional's August 2026 market update says the North American rate in July 2026 was more than 50% higher than in the summer of 2024. For a buyer that matters less than it sounds on a large deal and more than it sounds on a small one. A rising rate on a $100 million deal moves the price by tens of thousands of dollars. On a small deal the minimum premium already sits above the rate-based price, so a rising market mostly means insurers are less willing to write small deals at all.
What rep and warranty insurance actually pays out on in software deals
Claims are common. Aon's 2026 claims study found about 18% of North American policies bound from 2019 to 2023 received a claim notice, inside a historic range of 16% to 20%. Euclid reports 23 claim notices per 100 policies. Gallagher says roughly one policy in five had a notice but only about 4% led to a payment. The money goes to a short list of reps. By paid loss in Aon's study: financial statements 38%, material contracts 21%, compliance with laws 15.1% and intellectual property 11%. Euclid puts financial statements at 55% of all-time loss paid. Aon names churn and renewal misstatements in software targets specifically. That is the useful lesson for a small SaaS buyer who cannot justify a policy. The breach that costs insurers most is the one a buyer can test before closing: whether the revenue, churn and renewals in the seller's numbers match the billing system. Our guide to verifying MRR before buying covers how.
Who pays, and what the policy will not cover
Who pays is negotiated. Ice Miller and the Liberty Company describe an even split as the most common outcome, while Koley Jessen says the buyer typically bears it on a buy-side policy. A seller often agrees to share the cost because the policy shrinks the escrow: SRS Acquiom's 2026 Deal Terms Study, as tabled by Fasken, put the 2025 median indemnity escrow at 10.0% of deal value without insurance and 0.5% with it. The standard exclusions, per SRS Acquiom, are known breaches, purchase price adjustments, covenant breaches, forward-looking statements, underfunded pensions and net operating losses. Anything the buyer already knew about before signing is out, which is why diligence reports are part of the underwriting. Areas you did not diligence can be excluded too. The seller's non-compete is a covenant, so a seller who competes after closing is a breach of contract claim, not an insurance claim.
Keep reading on the parts of a deal this page touches: the due diligence checklist an underwriter will ask to see, earnouts, seller notes and holdbacks, the small-deal substitutes for insurance, the asset purchase agreement where the reps and the indemnity are written, what a quality of earnings report costs, the diligence underwriters rely on, how to verify MRR before you buy, the breach insurers pay most on, the seller non-compete, which RWI does not cover, the letter of intent where escrow or insurance is first agreed, what M&A counsel costs on a deal under $10 million, buy-side advisor fees, if you want someone to run the process.
Good questions
Rep and warranty insurance cost, answered
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Listings, metrics and buyers shown are illustrative product UI · valuation content is educational, not a guaranteed sale price or return · trademarks belong to their owners