Deal Point: The buyer and seller in a transaction have come to agreement about all the points other than the size of the indemnity supporting the representations and warranties. The buyer requires a $25,000,000 indemnity. The seller, a private equity firm that wishes to distribute most of the proceeds of the sale to its holder, will agree to a maximum indemnity of only $3,000,000.

Transactional Insurance Solution: A Representations & Warranties Insurance policy is issued for $22,000,000 in excess of $3,000,000 indemnity agreed to by the seller.