# Reps & warranties insurance (RWI)

A policy that pays a buyer for a breach instead of the seller paying.

It is uncommon at the smallest deals and more common as size climbs. The policy can shrink the [escrow holdback](https://searchspheresource.com/glossary/escrow-holdback) and speed a close. But a premium and a retention both cost real money, so it earns its place mainly when the seller's covenant is thin or the seller is leaving entirely.

In numbers: A policy written at 10% of a $5M price covers $500,000 of claims, and the recovery runs against the insurer rather than against a seller who has already spent the proceeds.

Source: https://searchspheresource.com/glossary/reps-and-warranties-insurance
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt