• Seller's Liability Insurance Application Form

    For SME businesses with sale prices from $250,000 upto $30 million

  • About TLPE

  • Transaction liability private enterprise (TLPE) insurance protects sellers against liabilities as a result of an inaccuracy in a warranty given by the seller to the buyer in connection with the sale of a micro or small target (asset or company) (i.e. targets with an enterprise value of between $250k and $30m). TLPE also covers defense costs. Please note, only sellers (or individuals giving warranties) can be insured under a TLPE policy-a buyer cannot be insured.

  • For the purposes of this application, "target" means the target, asset or company which you are selling.

  • For the purposes of this application, "target" means the target, asset or company which you are selling.

  • How to complete this form

  • The individual who completes this application form should be a senior member of management at the company and should ensure that they have checked with other senior managers and colleagues responsible for arranging the insurance that the questions are answered accurately and as completely as possible. Once completed, please return this form to your insurance broker.
  • The purpose of this application form is for us to find out more about you and the target you are selling. You must provide us with all information which may be material to the cover you wish to purchase and which may influence our decision whether to insure you, what cover we offer you or the premium we charge you. Should you not have enough space to provide your answer in the corresponding answer section of each question, you can use the space provided in the "Additional Information" section on the last page of this application.

  • Please attach the following materials are provided to us:

    • Contract for the sale of target / asset (including Disclosure Letter)
    • Prior 3 years financial statements of the target (including balance
      sheet and income statement)
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  • Section 1: Company Details

  • b) Is the name of the company different to its trading name?*
  • Has the company been known by any other name in the past five years?*

  • RESTRICTED ACTIVITIES

    a. Cryptocurrency or blockchain;
    b. Artificial intelligence;
    c. Gambling or casinos;
    d. Abortion clinics;
    e. Pornography / adult entertainment;
    f. Escort services / prostitution ventures;
    g. Paramilitary organisations;
    h. Military security utilising firearms / weapons;
    i. Armored car companies;

    j. The sale or production of weapons or ammunition;
    k. Cigarette / tobacco manufacturing;
    l. Financial guarantee bonds;
    m. Tar sands / oil sands extraction or production; or
    n. Manufacturing, distribution, production or sale of marijuana or marijuana derived products including CBD and THC products.

    Please note that if the target business is exposed to these activities then, the  transaction is likely to fall outside of our underwriting appetite.

  • Please confirm whether the target participates in any of the listed Restricted activities:*
  • Please confirm whether the company is located in Russia or China?*
  • 1.7 If "no", please confirm whether the target sells products or provides services in Russia or China?*

  • Section 2: Shareholder details

  • Please upload a spreadsheet/list which inlcudes

    the following information in relation to each individual or entity to be insured under this Policy and their involvement in the business or asset to be sold:

    • Name
    • Address
    • If the individual or entity will be giving warranties to the buyer
    • If the entity/inidvidual is to be included in this policy
    • Type of shareholder (Passive or Inolved in target/business)
    • Position held at target (if involved)
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  • Section 3: Transaction

  • a) Please confirm the transaction type:*
  • Please confirm the purchase price adjustment mechanism utilised in the acquisition agreement:*
  • Please confirm whether the buyer will acquire all the equity in the company?*
  • Please confirm whether the sellers will be rolling over any equity:*
  • Please confirm whether you are required to give an escrow under the acquisition agreement:*

  • We have seen TLPE insurance used to avoid the need for an escrow. If you are obliged to give an escrow, we are able to insure against the risk that the escrow is reduced in respect of any warranty claims.

  • Please confirm whether the buyer will know about the existence of the TLPE policy?*
  • Do you want the buyer to be named as a "loss payee" under the TLPE policy?*
  • Having the buyer as a "loss payee" means that the buyer can receive any claims paid under the TLPE policy directly from the insurer. Buyers generally see this as a benefit.

  • Section 4: Insurance

  • The policy limit should match the amount which the seller is indemnifying the buyer for in respect of breach of any warranty, plus defense costs. This is usually 100% of the enterprise value of the target / asset.

  • Section 5: Information about the Target

  • Please confirm whether the parties (buyer or seller) have prepared any diligence in respect of the transaction:*
  • Please confirm whether the target has engaged tax advisers to assist in filing tax returns and meetings its tax obligations:*
  • Please confirm whether the target has ever been subject to a tax audit, involved in litigation, investigated by a government agency or regulator (including tax authority) or in dispute with a third party or employee:*
  • Please state whether the target prepares financial accounts:*
  • If "yes", please confirm the applicable audit standards used in the preparation of the target's financial accounts:*
  • b) whether accounts are prepared on a modified basis:*
  • Please state whether the target is financially distressed:*
  • Please note that if the target is distressed or reliant on outside investment or debt to continue as a going concern, the transaction is unlikely to fall within our underwriting appetite.
  • Please state whether all tax returns have been duly filed:*
  • Please confirm whether the target owns any intellectual property which will be sold to the buyer in connection with the transaction:*
  • If "yes": please confirm whether the intellectual property is registered:*
  • 5.10 Please confirm if there is any recurring revenue in the target:*
  • 5.11 Please confirm whether the target requires any licences or permits to carry on its business:*
  • a) has made a claim under an insurance policy in the past 3 years:*
  • b) is aware of any claims, circumstances or incidents in the past 3 years which have not been notified to an insurance policy:*
  • c) is aware of any incident which resulted in legal action being made against the target in the past 3 years:*
  • 5.14 Please confirm whether the target owns any real estate which will be sold in connection with the transaction:*
  • 5.15 Has title insurance been obtained for the purposes of conveyancing the real estate being acquired in this transaction:*

  • Section 6: Notifiable Circumstances Declaration

  • Please state whether you are aware of any fact, matter or circumstance, which could result in a breach of any warranty in the contract for the sale of the target or asset:*
  • Are any of the assets of the business subject to any liens?*
  • Does the business have any overseas operations?*

  • Section 7: Additional Information

  • Important Information

    For your protection under legislation, we are required to inform you of your duty of disclosure and draw your attention to the following important information. 

    Duty of Disclosure

    To enable us to provide the right advice and before you enter into an insurance contract, you have a duty under the law to tell us anything that you know or could reasonably be expected to know, that may affect an Insurer's decision to insure you and on what terms.

    You have this duty until you enter into an insurance contract.

    You have this same duty before you renew, extend, vary or reinstate any insurance contract.

    Your duty, however, does not require disclosure of a matter: 

    reduces the risk you want insured; or
    that is common knowledge; or
    that the insurer knows or, in the ordinary course of business, should know; or
    if the Insurer was waived your duty to disclose. 
    Non-Disclosure

    If you fail to meet your Duty of Disclosure the Insurer may be entitled to reduce its liability under the contract in respect of a claim, or may cancel the insurance contract. if your non-disclosure was fraudulent, the Insurer may have the option of voiding the contract from the beginning (i.e. treating it as if it never existed). 

     

    DUTY TO TAKE REASONABLE CARE NOT TO MAKE A MISREPRESENTATION

     

    You have a duty under the Insurance Contracts Act 1984 (ICA) to take reasonable care not to make a misrepresentation to the insurer

    (your duty). Your duty applies only in respect of your policy that is a consumer insurance contract, which is a term defined in the ICA.

    This notice includes information you have previously told us that is relevant to your policy, which we passed on to the insurer. The

    insurer requires you to contact us to tell us if this information is incorrect, or if it has changed. If you do not tell us about a change to

    something you have previously told us, the insurer will take this to mean that there is no change. To ensure you meet your duty,

    when you contact us to advise of any information that is incorrect or has changed, the updated information you give us must be

    truthful, accurate and complete. If you fail to meet your duty, the insurer may be able to cancel your contract or reduce the amount it

    will pay if you make a claim, or both. If your failure is fraudulent, the insurer may be able to refuse to pay a claim and treat the

    contract as if it never existed.

    Complaints

    1. If you have a complaint about a service provided to you please contact Benjamin & Benjamin Insurance Group and tell us about your complaint. Will do our best to resolve it quickly.
    2. If your complaint is not satisfactorily resolved within 21 Days, please contact Tracy Scarella the McLardy McShane Complaints Officer at tracy@mclardymcshane.com.au or put your complaint in writing and send it to the address noted on page 1 of this FSG. McLardy McShane Partners Pty Ltd will try to resolve your complaint quickly and fairly.
    3. McLardy McShane Partners Pty Ltd is a member of the Australian Financial Complaints Authority (AFCA). If your complaint cannot be resolved to your satisfaction by us, you have the right to refer the matter to the AFCA. AFCA provides fair and independent financial services complaint resolution that is free to customers. The AFCA can be contacted at:
    Australian Financial Complaints Authority (mainly address)
    GPO Box 3, Melbourne VIC 3001
    Ph - 1800 931 678 | Email - info@afca.org.au | Website - www.afca.org.au

    Average / Co-insurance (Applicable to Some Property Policies)

    It is most important that the Sum Insured you select is adequate to represent the value of the insured property and is calculated in accordance with the cover being arranged to minimise the risk of under-insurance. Also, in some cases your policy may contain Average / Co-insurance provisions which means you may be responsible for paying part of the loss you actually suffer.

     Cancellation Warning (Retention of Brokerage and Fees)

    If a cover is cancelled before expiry of the period of insurance, we reserve the right to refund to you only the net return premium we receive from the insurer, and not refund any part of the brokerage or fees we received for arranging the cover. A broker service fee may also be charged to process the cancellation.

     Cooling Off

    All Retail Products are subject to a “cooling off period” of a minimum of 14 days and details of this are contained in the PDS. During this time, if you are not happy with a Retail Product, you may withdraw from the new contract at no cost to you other than our broker’s fee, which is not refundable.

    Disclaimer

    This notice is a summary only (errors and omissions excepted) and does not purport to be a copy of the insurance underwriters’ policy or other documents. In case of any discrepancy, the underwriters’ documents will prevail.

    New Policies

    Notwithstanding the above, you may not be insured if you do not submit the relevant Proposal within 30 days from commencement of the risk unless an extension of time has been agreed with us in writing.

    The Information We Collect

    McLardy McShane Partners Pty Ltd maintains a record of your personal profile, including details of insurance policies that we arrange for you. McLardy McShane Partners Pty Ltd may also maintain records of any recommendations or advice given to you. McLardy McShane Partners Pty Ltd will retain this FSG and any other FSG given to you as well as any SOA or PDS that we give or pass on to you for the period required by law.
    McLardy McShane Partners Pty Ltd is and we are committed to implementing and promoting a privacy policy, which will ensure the privacy and security of your personal information. A copy of our privacy policy is available on request.
    If you wish to look at your file, please ask us and we will arrange for you to do so.

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