Companies that are considering an M&A transaction should review their insurance policies to determine whether the carrier needs to be notified of the potential transaction. In some cases, failure to do so can cost the insured the coverage that it was expecting. In a case out of California (Scottsdale Insurance Co. v. CSC Agility Platform, Inc., C.D. Cal, Feb 4, 2019), the U.S. District Court for the Central District of California held that an insured’s failure to notify its insurer of a pending transaction allowed the insurer to deny coverage when an otherwise covered claim arose.
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