Deal Point: The potential purchaser in a transaction has completed all of its due diligence. Agreement has been reached with the prospective seller of the target company on the financial terms of the transaction. They only outstanding point to be dealt with before the transaction can close is the potential purchaser’s concern about the potential liability to the target company arising from a breach of contract lawsuit against the target company, despite the fact that this lawsuit was dismissed without prejudice five months ago. It is unwilling to close the transaction unless it receives an indemnity for this matter because of its concern that the lawsuit will be re-filed or appealed. The prospective seller is unwilling to provide the indemnity for this matter.

Transactional Insurance Solution: An Appeal Risk Insurance policy is issued to the purchaser. Coverage is provided for defense expenses, judgments and settlements relating to the dismissed litigation in the event that it is re-filed.