There are two issues to consider under product liability. First, if you are selling just the assets of the company, you have an exposure going forward from suits brought about by bodily injury or property damage caused by your products after the close of the deal. Generally the insurer providing your product liability at the time of the sale would be the best source of the coverage, but other carriers would write the coverage as well. Secondly, as a buyer, you may carry substantially higher product liability limits than the company you are acquiring. Coverage is available where you can retroactively buy higher limits to cover the product liability for the exposure of the products of the acquired company.
Recommendations Keep a detailed policy log for an indefinite period of time.
You may be surprised how little information is available from your insurance company or broker. The log should include the policy numbers, policy period, type of coverage and any special endorsements or deductible features. In addition, keep all liability insurance policies indefinitely. Your insurance broker should be able to provide a comprehensive questionnaire for your use, or be able to facilitate the process for you. Whether you are the buyer of seller, use professional advisors.