R&W Insurance Cost Calculator

2026 middle-market R&W pricing: tower size, retention with 12-month step-down, premium at market rates, allocation between buyer and seller, and direct comparison to traditional indemnity-escrow alternative. Companion to Chapter 11A of the Liquidity Event Playbook.

Deal Parameters

Enterprise Value (EV) $ millions

Tower size % of EV

Premium rate % of tower (2026 typical 2.5-4.0%)

Initial retention % of EV (typical 0.5-1.0%)

Stepped retention at 12 months % of EV (typical 0.25-0.5%)

Underwriting fee $ thousands

Premium allocation

Traditional escrow % % of EV; 10-15% typical without R&W

R&W Insurance Cost

Tower limit

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Maximum buyer recovery under policy

Initial retention

—

Self-insured before policy attaches

Stepped retention (12 mo+)

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After 12-month anniversary

Premium

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Rate × tower

Underwriting fee

—

Total cost

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Premium + UW fee

Buyer share / Seller share

—

Default 2026 convention is buyer-pay or 50/50 split. Premium allocation is heavily negotiable and frequently traded against other deal economics (purchase price, escrow size, working-capital target).

Comparison: R&W vs Traditional Escrow

Dimension	R&W Insurance regime	Traditional escrow regime
Buyer's recovery cap (year 1)	—	—
Seller's at-risk capital (12-18 mo)	—	—
Seller cash at close	—	—
Buyer counterparty for indemnity	Insurer (AIG, Chubb, etc.)	Seller (escrow agent)
Seller continuing exposure	Ends at policy attaching (fraud excluded)	Continues through survival period
Seller cost	—	$0 cash; opportunity cost on escrow

When R&W is worth it — rule of thumb

R&W tends to win above $25M EV — premium is amortized over enough deal value to justify cost.
R&W tends to lose below $10M EV — minimum carrier premium (~$200K) dominates the economics.
R&W is essentially mandatory in competitive auctions — buyers offering R&W are "clean-offer" differentiators.
R&W is the seller's path to truly clean exit — eliminates contingent indemnity to seller after the retention is exhausted.

Full chapter, broker directory, sample policy quote

The full mechanics of R&W underwriting, exclusions, retention step-down, tail periods by rep category, broker selection, carrier appetite, sample policy quote, and the buyer/seller-pay negotiation playbook are in The Liquidity Event Playbook, Chapter 11A. The R&W broker directory is at Appendix R.