E-commerce · Deal Structure
Indemnity and escrow reserve
Published · Reviewed by The Diligence Standard Team · Updated
Escrow economics should be assessed with survival, baskets, caps, exclusions and collectability.
Records to reconcile
- Draft indemnity terms
- Finding and exposure register
- Insurance and seller resources
Warning signal
The headline escrow amount is viewed without the limitations on actual recovery.
Transaction impact
Effective protection can be much lower than nominal value.
Response
Evaluate recoverability and avoid double counting with price adjustments.