What insurance history should I review before buying?

Insurance history does two things for a buyer. It shows what has actually gone wrong at the business before, which a site visit cannot, and it flags whether coverage and compliance are current enough that you are not inheriting a gap or an outstanding balance on day one.

The claims history itself

Ask the seller’s broker or insurer for a loss run — a summary of claims made over the last several years, including amounts and current status. A pattern of repeated claims of the same type, at a property or with a piece of equipment, points to an underlying issue worth investigating rather than treating each claim as isolated.

Current coverage and what changes at closing

• Whether existing policies are assignable or need to be replaced entirely on closing
• Coverage gaps relative to what the business actually does, not just what it did years ago
• Any exclusions that could matter given the specific operations
• How premiums have trended, since a rising premium often reflects a rising risk the insurer has already priced in

The workers’ compensation record

Where employees are covered by a provincial workers’ compensation scheme, request a clearance certificate confirming the account is in good standing before closing. An outstanding balance on this account can attach to a successor business in some circumstances, which makes it a compliance check worth doing directly rather than assuming it is fine because nobody mentioned it. This matters even more in construction and other higher-risk trades, where the clearance process is more closely scrutinized and a lapsed account is more likely to surface.

What a claims trend actually signals

A single old claim rarely says much on its own. A trend does. Rising premiums alongside a growing claims count over consecutive renewal periods usually means the insurer has already priced in a risk the seller may not have flagged, whether that is aging equipment, a property issue, or a safety practice worth asking about directly before you take it on.