Corporate Successors Can Tap Historical Liability Insurance Policies

This article originally appeared in Anderson Kill's Policyholder Advisor (January/February 2005).

Does a corporation that succeeds to another entity’s liabilities acquire rights to that entity’s insurance coverage for pre-acquisition operations? Several courts have answered this question in the affirmative. These courts have concluded that a corporate policyholder is entitled to defense and indemnity for pre-acquisition liabilities because liability insurance coverage follows the alleged liability by “operation of law.”