Rep and warranty insurance broker referral: screens, timing and the checks to clear first

Why are rep and warranty insurance brokers well placed to make introductions?

RWI brokers sit inside live deals. You see the buyer's counsel, the sell-side advisor and the target's CFO within the same few weeks, and you read the target's disclosure schedules and diligence reports closely enough to know how its systems and records work. That visibility is the reason an introduction from you can land with a sponsor who would ignore a cold approach.

The caveat is professional, not commercial. You are licensed, you owe duties to the insured, and your compensation sits inside insurance regulation. Clear the checks in this page before you mention data licensing to anyone.

Which insured parties and targets might qualify?

In a typical lower-middle-market placement, the party that may qualify is usually the target company or a portfolio company after closing, not the policyholder buyer. Use this screen on the deal files you already hold.

Services, software, IT, engineering and distribution targets tend to screen well. Consumer-heavy or health-record-heavy targets usually do not.

The RWI broker screen: Policy, Permission, Person

Three questions, in this order.

• Policy: does anything in the policy, the underwriting call notes or the NBIs create confidentiality duties that restrict mentioning a target's systems? Underwriters and insureds treat diligence material as confidential, so use only what the target or sponsor shares for this purpose, never deal documents.
• Permission: do your license, your firm's compliance policy and your state's insurance rules allow you to accept or even discuss a referral reward? Anti-rebating and anti-inducement rules differ by state, and carriers and brokerages add their own rules.
• Person: can you reach an authorized sponsor, such as the owner, CEO, CFO or an authorized representative, directly and outside the deal's confidential channel?

If any answer is no, stop. This is general information, not legal, tax or financial advice. Confirm with your own counsel, compliance team and state insurance department before acting.

When in the deal calendar can the topic come up?

Keep it away from the live underwriting window. These are the natural moments.

Our guide on data synergies in M&A frames the conversation for deal teams, and the page for corporate development teams shows how an acquirer's team thinks about it. The post-merger integration consultant page covers the people who handle system consolidation.

How does the introduction work without exposing any deal information?

You introduce; you never describe or handle confidential records.

1. Register as a partner and keep the referral link or the referral form ready.
2. Share only basic fit information the company has allowed, such as industry, approximate size and years in operation.
3. The company's sponsor decides whether to speak with SourceX.
4. SourceX qualifies size, history, data breadth and rights, then the company completes a data inventory.
5. Price and terms are agreed with the company before buyers review.
6. If a deal closes, data is delivered only after an executed agreement and the company's authorization, and the company is paid. Your reward follows after SourceX receives payment.

A company can also apply itself through your referral link, which attaches your referral code at sourcex.si/apply.

What to say

Do not reference the target's disclosure schedule, any exclusion or any claim. If the sponsor asks how you know anything about the target, say only what they told you.

How do rewards work for a licensed professional?

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company. Rewards become payable only after the buyer pays and SourceX receives its fee; a meeting or signed agreement alone does not trigger payment, and no reward is guaranteed. The reward is a share of SourceX's fee and is never deducted from what the company receives. See the program terms for the signed-agreement details.

Whether you may accept it is a question for your compliance team and state regulator. Declining the reward and making the introduction as a courtesy is a decision for you and your firm. If you do accept one, tell the company you introduce about it in writing before the introduction.

A related question is whether a former owner may refer the company they sold; see can a former owner refer the company they sold for how conflicts and restrictions work in that case. Business brokers face a similar set of questions on their own referral page.

When not to bother

• Your firm or carriers prohibit it, or compliance has not cleared it.
• The only route to the sponsor is through confidential deal channels.
• The company has fewer than 50 full-time employees at peak, or its records are mainly consumer personal data or protected health information.
• The company has already licensed its data for AI training.

Next step

Start with one company you already know from a closed deal and run it through the company fit checker, which is a preliminary, non-binding screen with no contact details required. The who qualifies page lists the full baseline. If your compliance team clears it, register as a partner.