Start by confirming which policies are in force today, in which company's name, and through what date. Then gather three sets of papers: the declarations pages (the summary page of each policy), the loss runs (each insurer's record of past claims) and your contracts. Check each major policy against the business you actually bought, and fix the urgent gaps before you plan a full review. This walkthrough is for new owners in the first week or two after closing, whether you bought with a search fund, a Small Business Administration (SBA) loan or through a holding company.
The short answer
- Confirm every policy is in force and names the company that now runs the business. In an asset purchase, the seller's policies usually do not move to your company without the insurer's written consent.
- Gather the declarations pages, the full policies with endorsements, several years of loss runs, your contracts and your lender's insurance requirements. A certificate is not the policy.
- Check each major policy against how the business runs today: payroll, vehicles, property values, operations and contract requirements.
- Fix true gaps this week, report the ownership change for workers' comp, and plan a full review well before the first renewal.
What should I do in the first week after closing?
The first week is not the time to shop every policy. It is the time to make sure nothing is missing and nothing is about to lapse. Work through five steps in order. Each step links to a deeper guide, so you can stop at the summary or keep going.
| Step | What to do | Why it matters | Go deeper |
|---|---|---|---|
| 1. Confirm what is in force | List every policy: carrier, policy number, named insured, dates, who pays | A policy in the wrong company's name may not protect the business you now own | Wrong named insured |
| 2. Gather the documents | Declarations pages, full policies, loss runs, schedules, contracts, lender requirements | You cannot judge coverage from a summary or a certificate | Documents checklist |
| 3. Check each major policy | Compare each policy to the business as it runs today | Owner-run businesses often carry stale payroll, vehicle and property data | Review step by step |
| 4. Spot the gaps | Look for missing coverages and contract requirements you do not meet | Customers, landlords and lenders may require coverage the seller never bought | Common gaps |
| 5. Fix the urgent items, then plan the review | Close true gaps now; leave pricing and structure for a full review | Rushed changes, like cancelling a policy before its replacement is bound, can open new gaps | First 90 days |
Do the seller's policies still cover the business I bought?
It depends mostly on how the deal was structured, so pull out your purchase agreement before you call anyone, and ask your deal counsel if the structure or the agreement's insurance terms are unclear.
- Stock or membership interest purchase. You bought the same legal company, so its policies usually stay in force in that company's name. Two things can still change. Directors and officers (D&O) policies usually have a "change in control" provision, and some employment practices and professional liability policies have one too. It can narrow coverage to acts before the sale or require notice to the insurer. And the workers' comp policy generally requires you to report the ownership change. Also check whether the company had its own policies or was one of several companies on the seller's combined program. If it was on the seller's program, that coverage usually ends at closing and the company needs its own policies.
- Asset purchase. Your company, often a new limited liability company (LLC), bought the assets. The Insurance Services Office (ISO) writes many standard policy forms. Its standard conditions say you cannot transfer a policy's rights and duties without the insurer's written consent. So the seller's policies usually keep protecting the seller's company, not yours, unless the carrier endorsed the change or wrote new policies for your company.
Do not count on automatic coverage to fill the gap. The standard ISO general liability form does give an organization you newly acquire or form some automatic coverage, but it applies to companies you acquire, not to assets you buy, and it has tight limits. It only extends a policy you already have. It lasts 90 days at most, or until that policy ends if sooner. It applies only if you own or hold a majority interest in the company and no other similar insurance is available. It never covers injury or damage before the acquisition, and it does not apply at all to an LLC, partnership or joint venture. Carrier forms vary, and most first-time buyers have no existing policy for it to attach to.
For each policy, get written answers to five questions:
- Who is the first named insured (the company listed first, which gets the bills and cancellation notices), and is the company that now runs the business listed?
- What are the effective and expiration dates?
- Is the premium paid, financed or overdue, and who is billed?
- Has the carrier been told about the sale, and has it agreed to anything in writing?
- Does the policy still describe the operations, locations and vehicles you actually have?
For the deal-structure details, see stock deal vs asset deal and policies that still list the seller. If you are weighing whether to keep the seller's program at all, read keep the seller's insurance or start over.
What documents should I gather?
Ask the seller, the seller's broker and each carrier for the same set of papers. The seller's broker may have run a perfectly good program for the old owner; you are simply checking fit for a new owner with new debt, new investors and new plans.
- Declarations pages for every policy (the summary page with limits, dates and named insureds).
- Full policies with every endorsement. Endorsements change the coverage more than most people expect; see why the endorsements matter.
- Loss runs (the insurer's report of past claims) from each carrier for the last several years, including open claims and reserves.
- Schedules of vehicles and drivers, buildings and equipment with values, and locations.
- Payroll by job type and state, plus the workers' comp experience mod worksheet if there is one.
- Contracts with insurance clauses: customer agreements, the lease, vendor and subcontract agreements.
- Your lender's insurance requirements from the commitment letter or loan agreement. If they include life or disability insurance, take that part to a life insurance specialist.
- Certificates the seller issued to customers, landlords and general contractors.
- Billing and premium finance agreements, so nothing cancels for nonpayment during the handover.
A certificate of insurance only summarizes coverage and gives the holder no rights of its own, so it cannot stand in for the policy. More on that in why a certificate is not coverage. The full list, with what to ask for and from whom, is in what documents you need for an insurance review.
How do I check each major policy quickly?
You are not trying to become an underwriter. You are looking for the mismatches that most often hurt new owners. Use this table as a first pass, then open the deeper guide for any line that looks wrong.
| Policy | Check first | Common red flag |
|---|---|---|
| General liability | Named insureds, description of operations, limits against contract requirements, additional insured endorsements | The policy describes the seller's old business, not what the company does now |
| Commercial property | Locations, building and contents limits, replacement cost or actual cash value, coinsurance percentage (how close to full value you must insure to avoid a claim penalty) | Limits copied from old values or set from the purchase price instead of the cost to rebuild and replace |
| Business income | Limit against the income and continuing expenses you would lose during a realistic rebuild period (often 12 months or more), waiting period (the hours before coverage starts) and extended period (extra time after reopening) | Assuming it pays if a key customer leaves; it generally responds only to income lost after direct physical damage to property |
| Workers' compensation | States listed, class codes, payroll estimates, experience mod | Class codes or payroll that do not match the work, which shows up later as an audit bill |
| Commercial auto | Vehicle schedule, who holds title, listed drivers, hired and non-owned auto | Vehicles still titled to the seller, or employees driving their own cars on business with no non-owned coverage |
| Umbrella | Which underlying policies it sits over, and its limits | Assuming it sits over professional, cyber, D&O or employment claims; it usually does not |
| Professional, cyber, employment practices liability insurance (EPLI), crime | Whether they exist at all; for claims-made policies, the retroactive date (the earliest date of acts the policy covers) | No coverage, or a retroactive date that leaves the seller's years uncovered |
A few workers' comp points catch new owners off guard. In states that use National Council on Compensation Insurance (NCCI) rules, the seller's claims history usually follows the business to you. That is true even in an asset purchase into a brand new LLC. So do not expect a fresh start on your experience mod (the multiplier that raises or lowers workers' comp premium based on past claims). Ohio, Washington, North Dakota and Wyoming sell workers' comp only through a state fund. Those policies generally leave out employers liability (coverage for lawsuits tied to a work injury), which is usually bought separately as "stop gap" coverage. Texas lets most private employers choose whether to carry workers' comp. Employers that opt out must report that to the state. Under Texas Labor Code section 406.033 they also give up several common defenses if an injured employee sues. Decide this with your broker and counsel.
Each line has its own new-owner guide, for example general liability, commercial property and workers' compensation.
Which gaps do new owners find most often?
Owner-run companies tend to buy what the owner needed years ago and then renew it. The same handful of gaps comes up again and again:
- No policy in the name of the company that now runs the business.
- Customer contracts that require additional insured status, a waiver of subrogation or higher limits than the policy carries.
- No cyber or crime coverage, even though the business stores customer data and wires money to vendors.
- No employment practices coverage, just as an ownership change unsettles the team.
- Property limits well below what it would cost to rebuild and replace equipment.
- Claims-made policies whose retroactive date leaves work done before closing without coverage.
- Old certificates still circulating that describe coverage the business no longer has.
The full list, with how to spot each one, is in 15 coverage gaps new owners find. If a customer contract is the problem, start with when contracts require coverage you do not have. For the pre-closing work question, see prior acts and tail coverage.
What needs fixing now, and what can wait until renewal?
Sort what you find by timing. Real gaps get fixed now. Pricing and structure get fixed in the full review, when you have time to do it well.
| When | What to fix |
|---|---|
| This week: coverage |
|
| This week: notices and deadlines |
|
| Within 30 to 90 days | Correct named insureds and remove the seller where it no longer belongs; reissue certificates; follow up until the insurer confirms it has the workers' comp ownership change report |
| At or before renewal | Shop the coverage to other carriers if it makes sense, revisit deductibles, consolidate policies, and correct payroll and class codes going forward |
One rule applies throughout: a quote or an application is not coverage. Until a carrier binds the policy and you have a binder or the policy in hand, treat the gap as open, and do not cancel anything before its replacement is bound.
A hypothetical example. A buyer closes a stock purchase of a commercial cleaning company on the 1st of the month. The policies stay with the same company, so the declarations pages look fine: the right named insured, and dates running to next spring. On day three the buyer asks the third question on the list above: is the premium paid, and who is billed? The general liability and auto premiums were financed, and the finance company's statements went to the seller's personal email. One installment is past due, and a notice of intent to cancel for nonpayment is already sitting in that inbox. The buyer pays the installment that day, moves the billing contact to the company and asks the broker to get written confirmation from the carriers that the policies remain in force. A ten-minute check caught a cancellation the declarations pages could not show.
When should I do the full insurance review?
Once the urgent items are handled, start a full review in your first month and aim to finish it, with the fixes bound, by day 90, and in any case well before the first renewal. That gives you time to correct the data the premium is built on, explain the new ownership to underwriters and, if it makes sense, ask other carriers to quote (remarket) 90 to 120 days ahead of renewal.
A full review goes deeper than this first-week check: it reads the endorsements and exclusions, tests limits against contracts and worst-case losses, and checks claims-made coverage for pre-closing work. Read what a business insurance review is and what happens in one, step by step. When you are ready to work on cost, the order of operations is in how to reduce insurance costs after you buy a business.
If you have a board or investors, give them a one-page summary of what you found and what you fixed. How to report on insurance to your investors and board shows a simple format. Morrow can also review the policies you inherited, flag gaps and request quotes where a change makes sense.
Keep reading
- Your First 90 Days of Insurance After Buying a Business: A Checklist
- Should I Keep the Seller's Insurance or Start Over? A Decision Guide
- What Documents Do I Need for an Insurance Review?
- 15 Coverage Gaps New Owners Find in Owner-Run Businesses
- What Happens in a Business Insurance Review, Step by Step
- All guides for new business owners
Frequently asked questions
Can I just keep the seller's insurance until it renews?
Sometimes, but only after you confirm it actually covers the business you own. In a stock purchase the policies usually stay with the same company, though claims-made policies may have change in control terms and workers' comp needs the ownership change reported. In an asset purchase the seller's policies usually protect the seller's company, not yours, unless the carrier agreed in writing. Under the standard general liability form, automatic coverage for a newly acquired company is narrow and does not apply to an LLC. Carrier forms vary, so do not rely on it.
What should I check first if I only have an hour?
Pull the declarations page for each policy and check two things: that the company now running the business is a named insured, and that the policy is in force today with the premium paid. If either is wrong on a core policy such as general liability, workers' comp or auto, fix that before anything else.
Do I need to tell the workers' comp insurer about the sale?
Yes. In states that use NCCI rules, and in several states with their own rating bureaus, the policy requires you to report an ownership change within 90 days. The rating organization then decides how the change affects your experience mod, and a revised mod can apply back to the date of the change.
Is a certificate of insurance enough to confirm I am covered?
No. A certificate summarizes coverage on one date and gives the holder no rights. To confirm coverage, read the declarations page and the endorsements of the actual policy, and check that your company is a named insured.
Should I call the seller's broker or find a new one?
Either can work. The seller's broker knows the history and may have served the old owner well, so a handover call is often useful. What matters is that someone reviews the program for your situation as the new owner, including your lender, investors and plans.
References
- ISO: Common Policy Conditions, IL 00 17 11 98 (carrier-hosted copy)
- ISO: Commercial General Liability Coverage Form, CG 00 01 12 07 (carrier-hosted copy)
- IRMI: Newly acquired entities (definition)
- NCCI: ABCs of Experience Rating
- NCCI: Reporting Ownership Change Information
- American Academy of Actuaries: Influential Features in the Workers' Compensation System (October 2025)
- Texas Department of Insurance: Workers' compensation information for employers
- ISO: Business Income (And Extra Expense) Coverage Form, CP 00 30 10 12
- Texas Legislature: Labor Code chapter 406, section 406.033 (common-law defenses for employers without coverage)
Just bought a business? Get your insurance reviewed.
Send Morrow the declarations pages, loss runs and key contracts you inherited. Morrow can review them against the business you bought, flag gaps and request quotes where it makes sense. Any new terms depend on carrier underwriting.
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This article is general information, not legal, tax or financial advice, and not a coverage determination. Coverage depends on the actual policy wording, carrier underwriting, your purchase agreement and your contracts. Ask your attorney and accountant about deal and legal questions.