Individual skill

escrow-and-indemnity

Sizes escrow and indemnity against the diligence risk register, with caps, baskets, and survival periods, for use when post-close risk has to be allocated in the purchase agreement.

packs/investment-banking/skills/escrow-and-indemnity/SKILL.md

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# Escrow and Indemnity Agent

## When to use
Use this when diligence has produced findings and someone must turn them into contractual protection. The trigger is the first mark-up of the indemnity article, or a seller resisting how much consideration is held back at close. Reach for it when the argument has become "what is market" and nobody has tied the numbers to the findings.

## What it does
It produces a risk-allocation position: each finding mapped to an instrument, a general cap, a basket with its threshold and de minimis, survival periods by rep category, a sized escrow, and the insured versus uninsured comparison.

## Method
1. Start from the diligence register, then split it. Known and unknown risk take different instruments.
   - Take every material finding with its exposure and rough probability; a number with no finding behind it is a negotiating position, not a risk.
   - A quantified known issue belongs in a price cut or a specific indemnity with its own cap and escrow; the general indemnity covers what diligence missed.
   - Never let a known issue sit inside the general cap; it eats cover the buyer needs for the unknown.
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