Frequency/market practice: Very common; the common cap amount is typically between 10%-50%. ‘True’ fundamental warranties, such as those relating to title to shares are almost always capped at the amount of the purchase price.
Frequency/market practice: Very common; the maximum liability cap applies to all of the seller's obligations under the agreement. Other than in relation to warranties, de minimis thresholds and basket liability caps do not apply.
Frequency/market practice: Tax liability, leakage, confidentiality and noncompete undertakings or specific indemnities are often exempted. Liability under these undertakings is often not capped or made subject to a specific regime (sometimes with specific higher caps).
Frequency/market practice: Very common; deductible is usually resisted. A tipping basket is more common.
Frequency/market practice: A general survival of 18–24 months for business warranties is common. For fundamental warranties it is often three or five years, and for tax liabilities often seven years.
Frequency/market practice: It is common to carve out key warranties (e.g., title, capitalization, authority, tax, employment and environmental) as well as fraud.
Frequency/market practice: Very common; it is considered in most deals unless either: (i) the transaction size is too small in light of the insurance premium; or (ii) it is due to particular circumstances – e.g. the target industry being heavily regulated – where it is more challenging to obtain W&I insurance.