Earnout insurance is a transactional insurance policy that covers the risk of dispute or non-payment linked to a contingent earn-out consideration. It protects the seller against manipulation of the accounts by the buyer to minimise the earn-out, or the buyer against a disagreement over the calculation, by transferring the risk to an insurer.

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It belongs to the emerging family of transactional insurance moving down into the mid-market in 2026, alongside W&I insurance. It can unlock negotiations on complex earn-outs by neutralising a recurring point of friction.

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Example: in the sale of an SME with a CHF 2.0 million earn-out over three years, the seller takes out earnout insurance covering the risk of a dispute over the EBITDA calculation, for a premium of a few percent of the covered cap, securing its deferred consideration.

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At Hectelion, we advise on the merits of earnout insurance when structuring deferred consideration in our sell-side mandates.