Does a business's insurance actually cover what I think it covers?

Not necessarily, and assuming it does is a common mistake buyers make. Existing insurance policies are written around the current insured — the selling corporation, its particular operations, and its claims history — and coverage doesn't automatically extend to cover a new owner's future operations, especially if you're planning to change how the business runs, expand its activities, or restructure the deal as an asset purchase where the buying entity is legally distinct from the one the policy was written for.

It's also worth checking what's actually excluded, not just what's included — general liability policies commonly carve out things like environmental claims, cyberattacks, or professional errors, and a business that looks adequately insured on paper can have real gaps once you look at the exclusions rather than the coverage summary.

Have your own insurance broker review the existing policies against what you actually plan to do with the business, rather than assuming coverage simply transfers or that "insured" means "covered for everything." Arranging your own policy effective at closing, rather than relying on the seller's, is standard practice. A Treadstone business lawyer can help coordinate this alongside your closing conditions.