Australia's hospitality sector continues to attract strong investor interest, with pubs, hotels, clubs and accommodation businesses changing hands at increasingly significant values.
As transactions become larger and more sophisticated, buyers and sellers are seeking ways to reduce risk, protect value and provide greater certainty throughout the deal process.
One solution gaining momentum across the sector is Warranty & Indemnity (W&I) Insurance.
Warranty & Indemnity Insurance protects buyers against financial loss arising from unknown issues that are discovered after settlement and should have been disclosed during the sale process.
Rather than pursuing the seller directly for compensation, a buyer may be able to recover the loss through the insurer. This can help preserve commercial relationships, reduce the likelihood of disputes and provide greater confidence for all parties involved.
Hospitality transactions often involve a complex mix of operational, regulatory, employment and property-related risks.
Even after comprehensive due diligence, unforeseen issues can emerge following settlement, including:
For buyers, W&I Insurance provides an additional layer of protection against these unknown risks, helping safeguard the value of their investment.
The benefits of W&I Insurance are not limited to buyers.
For sellers, the cover can reduce the need for sale proceeds to be retained in escrow or held back against future warranty claims. This creates greater certainty around the final value realised from a transaction and can help make a business more attractive to prospective purchasers.
For family-owned businesses, investors and hospitality groups looking to monetise years of hard work, this can be a significant advantage.
While W&I Insurance is a valuable risk management tool, it is not a substitute for thorough due diligence.
Insurers expect buyers to undertake comprehensive legal, financial, tax and operational reviews before cover is considered. The policy is intended to respond to unknown risks, not matters that have already been identified during the transaction process.
At GSA, we continue to see significant activity across the hospitality sector.
In 2025, seven of the purchasers and six of the sellers involved in Australia's top 10 hotel transactions were GSA clients.
This level of involvement provides us with a unique perspective on emerging transaction trends and reinforces GSA's position as a trusted adviser to hospitality owners, investors and operators.
Whether you're planning an acquisition, merger, capital raise or sale, understanding the role W&I Insurance can play early in the transaction process may help protect deal value, enhance negotiating flexibility and reduce the risk of unexpected surprises after settlement.
Contact the GSA Hospitality team to discuss whether Warranty & Indemnity Insurance should form part of your transaction strategy.
