Calling seller's current insurer and accidentally disrupting coverage?

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management

2 years ago

I'm under LOI on a home services company asset sale. I have permission from the seller to contact the current broker since, I figure, just creating a new policy post-acquisition with the current broker will be easier than finding a new broker (so long as the price and coverage is right).

However, when the seller gave me permission, she wanted to make sure that there'd be no disruption in coverage as a result. Is that a risk?

Because, if it is a risk, then it might make sense to NOT use the current broker (since I'd need insurance coverage to start on day 1 and thus couldn't wait until post-acquisition to start shopping around).

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professional from University of Kentucky

Charles, remember no brokers have "800" numbers to secret rates, its all about what you are getting with that broker. Data, Risk mitigation, independent guidance. Some are captive in nature, so the fiduciary sense goes out the window. Get a letter of Authority and get a baseline assessment done, so you have a clear picture of what you know, but most importantly WHAT YOU DON'T know. DM me for more direction and guidance on how to walk into success on this vs. rushing into failure.

2 years ago | like reply | 0 likes

professional from University of Kentucky

Letter of Authority will not present a disruption, but allow you to unearth and baseline the actual risk vs. policy, that will give you insight to what your liability is that IS NOT covered. Always do a baseline assessment on the insurance side. Give me a ring, if you want a "playbook' of sorts.

2 years ago | like reply | 0 likes

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