An indemnity basket (sometimes called a threshold or de minimis) is a minimum aggregate amount of warranty and indemnity claims that must accrue before the buyer can recover any amount from the seller. Australian deals typically structure baskets in one of two ways: a true deductible (only amounts above the basket are recoverable) or a “tipping basket” (once the threshold is crossed, the entire amount becomes recoverable from dollar one).
Basket levels in sub-$20M Australian deals typically range from 0.5% to 1% of purchase price.