Do I need new insurance the moment I take over a business?

Insurance is one of the easiest things to leave until the last minute and one of the worst things to actually leave until the last minute. A business without active coverage, even briefly, is exposed to any loss that happens during that gap, and closing day is precisely when unexpected things tend to happen.

Coverage does not just carry over with ownership

The seller’s insurance policy is written to the seller as the named insured, and it does not automatically extend to a new owner just because the sale has closed. A buyer needs their own policy — property, general liability and business interruption at minimum — bound and confirmed active precisely at the moment closing happens, not arranged afterward as a formality.

Coordinate timing with both insurers, not just one

Getting the buyer’s coverage to start at the same instant the seller’s coverage ends takes active coordination between both parties’ insurance brokers, and it is worth confirming in writing rather than assuming it will simply work out. A signed certificate of insurance for the buyer’s new policy is a reasonable thing to expect to see before funds actually release on closing day.

Workers’ compensation registration is a separate step

Coverage for workplace injuries runs through a separate, province-specific system rather than a commercial insurance policy — in Ontario that is the Workplace Safety and Insurance Board, and every other province runs its own equivalent body. A buyer taking on employees needs to confirm their own registration and clearance status is active from day one, since operating without it can create liability that a general insurance policy does not cover.

Do not assume the old policy limits are the right ones

Closing is also a reasonable moment to reassess coverage limits rather than simply replicating whatever the seller carried, since the seller’s policy may reflect years-old valuations, an outdated inventory count, or coverage gaps nobody had gotten around to fixing. A fresh look from the buyer’s own broker, informed by current replacement values, is worth the time it takes.