EPISODE · Jun 18, 2026 · 9 MIN
How the Reps and Warranties Insurance Trap Sours Middle-Market Deals
from The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators · host Fexingo
Lucas and Luna unpack the hidden risks of reps and warranties insurance in middle-market M&A. They examine a 2024 case where a $200 million deal collapsed after a buyer discovered a data privacy breach that the RWI carrier refused to cover, citing a 'known breach' exclusion buried in the policy's underwriting notes. Lucas explains how RWI shifted from a seller-friendly tool to a litigation battlefield, with carriers denying coverage on 23% of claims in 2025. Luna highlights the real cost: sellers who thought they were protected end up losing millions in escrow disputes. They discuss how due diligence must now include a 'policy gap analysis' and why the standard RWI form leaves both sides exposed. A practical episode for anyone navigating buyout agreements. #RepsAndWarrantiesInsurance #MiddleMarketM&A #DataBreachLiability #DealStructure #AcquisitionRisk #UnderwritingGaps #DueDiligence #EscrowDispute #IndemnityClause #BusinessExit #MergersAndAcquisitions #PrivateEquity #LegalRisk #InsuranceClaimDenial #SellerProtection #BuyerRemedies #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo
What this episode covers
Lucas and Luna unpack the hidden risks of reps and warranties insurance in middle-market M&A. They examine a 2024 case where a $200 million deal collapsed after a buyer discovered a data privacy breach that the RWI carrier refused to cover, citing a 'known breach' exclusion buried in the policy's underwriting notes. Lucas explains how RWI shifted from a seller-friendly tool to a litigation battlefield, with carriers denying coverage on 23% of claims in 2025. Luna highlights the real cost: sellers who thought they were protected end up losing millions in escrow disputes. They discuss how due diligence must now include a 'policy gap analysis' and why the standard RWI form leaves both sides exposed. A practical episode for anyone navigating buyout agreements. #RepsAndWarrantiesInsurance #MiddleMarketM&A #DataBreachLiability #DealStructure #AcquisitionRisk #UnderwritingGaps #DueDiligence #EscrowDispute #IndemnityClause #BusinessExit #MergersAndAcquisitions #PrivateEquity #LegalRisk #InsuranceClaimDenial #SellerProtection #BuyerRemedies #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo
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How the Reps and Warranties Insurance Trap Sours Middle-Market Deals
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